Moderna Thursday said it paused plans to build an mRNA manufacturing facility in Kenya to buy time to assess vaccine demand after being hit with $1 billion in losses and write-downs due to canceled orders.
Moderna said it paused plans to build an mRNA manufacturing facility in Kenya Thursday in an effort to provide additional time to assess demand for vaccines after suffering $1 billion in losses and write-downs linked to canceled orders.
The biotech outlined plans to invest up to $500 million in an mRNA manufacturing site in Kenya in 2022. Moderna’s goal was to produce up to 500 million doses each year for the African continent. The biotech took a step toward that goal in 2023, when it finalized an agreement with the Kenyan government, but has now pulled back from the plan in response to changes in the COVID-19 vaccine market.
Modena has put the project on hold while it assesses future demand for mRNA vaccines in Africa. Demand for COVID-19 vaccines has fallen since the pandemic, the company said, and is now “insufficient to support the viability of the factory planned in Kenya.”
New African orders for COVID-19 vaccines have dried up, with Moderna last receiving a contract in 2022 while governments have canceled their existing agreements. The cancellations resulted in more than $1 billion in losses and write-downs, the company said.
Moderna initially committed to the project after the COVID-19 pandemic raised concerns about Africa’s reliance on other continents for vaccines. African countries were among the last places on earth to start COVID-19 vaccination campaigns, in part because they received supplies of the products later than other regions with their own manufacturing capabilities.
The Kenyan plant was one of several efforts to create mRNA production capabilities in Africa. BioNTech, the company behind Pfizer’s COVID-19 vaccine, is setting up a facility in Rwanda. The biotech plans to complete the buildings and start local training of specialized personnel in the facility this year with a view to starting test mRNA production for process validation in 2025. The World Health Organization has set up an mRNA vaccine technology transfer hub in South Africa.
Moderna’s decision to pause work on the Kenyan project follows a broader reassessment of its vaccine manufacturing needs. Demand for Moderna’s Spikevax COVID-19 vaccines has fallen globally, causing net product sales to fall more than 60% last year. The biotech responded by exiting contract manufacturing relationships and resizing its footprint.
The company’s manufacturing footprint was “established to support capacity at pandemic levels,” Moderna CEO Stéphane Bancel said on an earnings call in February 2024. With demand down, the biotech reduced its footprint and reported $3.7 billion in charges related to the resizing and taxes.
Nick Paul Taylor is a freelance pharmaceutical and biotech writer based in London. He can be reached on LinkedIn.
