Moderna puts plans for African vaccine plant on hold

Pledges to invest in pandemic preparedness with facility in Kenya fall short as sales of Covid jabs decline

US biotech Moderna has put plans to build a vaccine plant in Kenya on hold, in a sign that moves to invest in pandemic preparedness in Africa have dropped down the agenda as sales of Covid-19 jabs decline.

The Boston-based company struck a deal with the Kenyan government a year ago to invest about $200mn in a facility that would produce up to 500mn vaccine shots a year. But it has yet to buy a plot earmarked for it in a special economic zone near Nairobi, said two people familiar with the matter.

Senior officials from the US and the east African country, including President William Ruto, joined efforts to get the deal over the line.

The Kenyan government gave Moderna several tax breaks and allowed it to more than halve its original planned investment of $500mn, the people said. But as sales of its messenger RNA-based vaccine decline, the company has stalled over the purchase of a five to 10-acre plot in Tatu City economic zone. Costs to buy land in the industrial park are about $1mn per acre.

In a statement to the Financial Times, Moderna confirmed it had “paused its efforts” to build a vaccine plant in Kenya. “The demand in Africa for Covid-19 vaccines has declined since the pandemic and is insufficient to support the viability of the factory,” it said.

Promises from governments and pharmaceutical companies to boost vaccine equity and pandemic preparedness in anticipation of the next global health crisis have fallen down the political agenda, while disputes between richer and poorer nations could lead to a pandemic treaty being delayed beyond the World Health Organization’s May deadline.

Alfred Mutua, Kenya’s tourism minister who helped to broker the deal with Moderna while leading the foreign ministry, told the FT the agreement was “not dead completely [but] was just put on hold as we evaluated needs together”.

Moderna’s decision comes as the company aims to convince investors it can expand its product pipeline. Its market capitalisation was nearly $43bn on Wednesday, down 75 per cent from a peak in late 2021.

Sales of its Covid-19 mRNA vaccine, its only approved product, are projected to total $3.9bn this year, according to a consensus of analysts’ estimates, down 79 per cent from peak sales of $18.4bn in 2022. No African public health body has procured Covid-19 vaccines since 2022 but 3.1mn doses were delivered last year.

Tatu City officials were expecting payment from Moderna for the plot of land last year, according to other people familiar with the deal. Moderna executives have not visited the site since 2022 but met their Kenyan lawyers Anjarwalla & Khanna on a visit to the country last year.

One obstacle to mRNA vaccine use in African countries is the shortage of “cold chain” facilities to keep shots at the required low temperatures during distribution and storage.

Germany’s BioNTech, which developed its own mRNA-based Covid vaccine with Pfizer, has also scaled back its African ambitions but has broken ground on a vaccine manufacturing site in Rwanda. The facility is expected to be completed next year.

The Coalition for Epidemic Preparedness Innovations has longer-term plans to build production capacity in Senegal with the Institut Pasteur de Dakar. The World Bank-backed Kenya BioVax Institute is also developing a vaccine plant.

In South Africa, Afrigen Biologics and Vaccines said it will, once licensed, be able to produce about 50mn mRNA-based doses a year in the event of a new pandemic.

Speaking to the FT this month at an investor event, Moderna chief executive Stéphane Bancel shifted the blame for the troubles with the Kenyan project on to Nairobi and Africa’s public health bodies.

“What has changed is the desire of the Africa [Centres for Disease Control and Prevention] to buy products right now,” he said.

Shannon Thyme Klinger, chief legal officer of Moderna, said a lack of new orders and cancellation of previous ones had resulted in more than $1bn in losses and writedowns since 2022.

“Given the lack of demand, we must reassess the most effective way to ensure equitable access in the short term to our Covid-19 and late-stage respiratory pipeline products in Africa,” she said.

Moderna said it was preparing to launch a vaccine targeting respiratory syncytial virus (RSV) later this year, while its pipeline includes a combined Covid and flu vaccine and a next-generation coronavirus vaccine.

The Africa CDC did not respond to requests for comment. Rendeavour, the real estate developer behind Tatu City, declined to comment.

This article originally appeared on the Financial Times

Image: Getty