GSK stock rose higher in after-hours trading on July 31, 2020, after the company announced a collaborative effort with the U.S. government to accelerate the development and manufacturing of a COVID-19 recombinant protein-based vaccine.

Sanofi (SNY) and GSK (GSK) announce a collaborative effort with the U.S. government to accelerate the development and manufacturing of a COVID-19 recombinant protein-based vaccine.

The vaccine candidate, developed by Sanofi in partnership with GSK, is based on the recombinant protein-based technology used by Sanofi to produce an influenza vaccine, and GSK’s established pandemic adjuvant technology.

Collaborating with the U.S. Department of Health and Human Services and Department of Defense will help fund the development activities and secure scale-up of Sanofi’s and GSK’s manufacturing capabilities in the United States for the recombinant protein-based, adjuvanted vaccine, resulting in a significant increase in capacity.

The U.S. government will provide up to $2.1B, more than half of which is to support further development of the vaccine, including clinical trials, with the remainder used for manufacturing scale-up and delivery of an initial 100 million doses of the vaccine.

Sanofi will receive the majority of the U.S. government funding. The U.S. government has a further option for the supply of an additional 500 million doses longer term. This helps the U.S. government’s Operation Warp Speed goals of providing millions of doses of a safe and effective COVID-19 vaccine.

Sanofi is leading the clinical development and registration of the COVID-19 vaccine and expects a Phase 1/2 study to start in September, followed by a Phase 3 study by the end of 2020. If the data are positive, the companies can request U.S. regulatory approval in the first half of 2021. In parallel, Sanofi and GSK are scaling up manufacturing of the antigen and adjuvant to produce up to one billion doses per year globally.

On July 30, 2020, GlaxoSmithKline was awarded a $342M firm-fixed-price contract to procure mass quantities of COVID-19 vaccines from multiple vendors to support military locations and personnel throughout the continental U.S. and outside the continental U.S. Bids were solicited via the internet with one received. Work will be performed in Research Triangle Park, North Carolina, with an estimated completion date of February 28, 2021. FY20 research, development, test and evaluation funds in the amount of $342M were obligated at the time of the award. U.S. Army Contracting Command is the contracting activity.

On July 30, 2020, President Donald Trump tweeted: “Drug prices will soon be lowered massively. Big Pharma (Drug Companies) are advertising against me like crazy because lower prices mean less profit. When you watch a Fake Ad, just think lower drug prices!!!” Publicly traded companies in the space include AstraZeneca (AZN), Bristol-Myers (BMY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), Novartis (NVS), Pfizer (PFE), Roche (RHHBY) and Sanofi (SNY).

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