Sanofi and GlaxoSmithKline Snag a $2.1 Billion Contract for Their Coronavirus Vaccine

Sanofi (NASDAQ: SNY) and GlaxoSmithKline (NYSE: GSK) secured $2.1 billion from the U.S. government to help support development and manufacturing of their coronavirus vaccine to help prevent COVID-19.

The contract, which is part of Operation Warp Speed, calls for Sanofi and GlaxoSmithKline to deliver 100 million doses of the vaccine in exchange for the upfront financial help. The government also has an option to purchase an additional 500 million doses for an undisclosed amount -- assuming, of course, that the vaccine protects patients in clinical trials.

In addition to the supplying the U.S. government, Sanofi and GlaxoSmithKline noted that they're discussing potential sales to European countries with the EU Commission.

Hand holding a syringe that's being injected into a shoulder

Image source: Getty Images.

Sanofi and GlaxoSmithKline plan to start a phase 1/2 clinical trial in September. The protein-based vaccine is substantially behind mRNA vaccines from Moderna and BioNTech, which are in or close to phase 3 development. Unfortunately, protein-based vaccines are harder to design, and setting up the manufacturing process takes longer.

On the plus side, protein-based vaccines have a long history of working, while mRNA is a new, unproven technology. With more experience, Sanofi and GlaxoSmithKline may be able to get through early-stage studies quicker. The duo is shooting for starting a phase 3 study by the end of 2020, putting it less than five months behind the leaders.

Of course, Sanofi also has a hand in the mRNA vaccine race through its partnership with Translate Bio (NASDAQ: TBIO). Unfortunately, going into the pandemic, Translate Bio wasn't as established as Moderna and BioNTech, so it's taken the biotech a bit longer to develop an mRNA vaccine candidate. Sanofi and Translate expect to start a phase 1 clinical trial by the end of the year.

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