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Moderna (MRNA) to Supply Omicron-based COVID Jab in Canada

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Moderna (MRNA - Free Report) announced that it would supply 12 million doses of its Omicron-containing bivalent vaccine booster vaccine to the Canadian government as part of the agreement entered between the two parties last year for the supply of COVID-19 vaccine doses.

All these doses are expected to be delivered in 2022. We note that the Omicron-specific bivalent vaccine is yet to be approved by Canada’s health authorities.

The Canadian government has exercised its option to purchase an additional 4.5 million doses of Moderna’s Omicron-containing bivalent vaccine booster. The company will also prepone delivery of 1.5 million doses in 2022, originally scheduled for delivery next year.

In addition, the parties have agreed to convert an order seeking 6 million doses of Spikevax for an Omicron-containing bivalent vaccine booster.

Shares of Novavax have declined 43.9% so far this year compared with the industry’s 21.9% fall.

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This agreement with the Canadian government will enable Moderna to supply its COVID vaccine for 2022 and 2023. The government will purchase up to 65 million doses each year. The agreement also carries an option, allowing the Canadian government to extend into 2024. The agreement also allows the government of Canada to purchase new vaccine adaptations developed by Moderna.

Last month, the company announced new clinical data on its bivalent COVID-19 vaccine booster candidate mRNA-1273.214, which was developed to target the Omicron variant.The new clinical data showed that study participants who received a 50 µg dose of mRNA-1273.214 (irrespective of prior infection or age) generated higher neutralizing antibodies against the Omicron subvariants BA.4 and BA.5 following a month-long administration compared with those who received a booster dose of Spikevax.

Moderna has also developed mRNA-1273.222, a bivalent booster candidate containing its original vaccine, Spikevax, plus the Omicron BA.4/5 strain mRNA. Moderna is expected to seek EUA from the FDA soon.

In fact, the development of mRNA-1273.222 was initiated after the FDA recommended vaccine makers develop bivalent booster vaccines targeting the Omicron BA.4 and BA.5 subvariants. Last month, Moderna announced secured an advance purchase agreement with the U.S. government to supply up to 300 million mRNA-1273.222 doses for a payment of $1.74 billion.

Like Moderna, Pfizer (PFE - Free Report) and its partner BioNTech (BNTX - Free Report) are also developing their Omicron-based vaccines. Earlier this week, Pfizer/BioNTech announced that they have completed filing an application seeking Emergency Use Authorization (EUA) for a 30-µg booster dose of their bivalent Omicron-based COVID-19 vaccine that targets the BA.4/BA.5 Omicron variant for individuals 12 years of age and older. The subvariants, BA.4 and BA.5, are the most prevalent variants of concern in the United States as of now

The filing includes data from studies on their bivalent Omicron BA.1-adapted vaccine as well as pre-clinical and manufacturing data from their Omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine. Pfizer/BioNTech have already scaled production of the Omicron BA.4/BA.5-adapted bivalent boosters and will be ready to ship doses as soon as the FDA grants EUA

In June, Pfizer and BioNTech also announced that they reached an agreement with the United States government to supply 105 million doses of their COVID-19 vaccine by this year. Upon receiving these doses, the U.S. government will pay $3.2 billion to the companies. However, the deal is contingent upon Pfizer securing a EUA for this vaccine.


Zacks Rank & Key Pick

Moderna currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the overall healthcare sector is Morphic (MORF - Free Report) , which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, estimates for Morphic’s 2022 loss per share have narrowed from $3.38 to $1.75. Loss estimates for 2023 have narrowed from $3.91 to $3.77 during the same period. Shares of Morphic have lost 37.5% in the year-to-date period.

Earnings of Morphic beat estimates in three of the last four quarters and missed the mark just once, witnessing a surprise of 48.29%, on average. In the last reported quarter, MORF delivered an earnings surprise of 183.95%.

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