Pfizer, BioNTech reach $1.95 billion vaccine deal with U.S. government

Pfizer and BioNTech will supply the federal government with 100 million doses of coronavirus vaccine under a $1.95 billion deal the biotech companies announced Wednesday.

The agreement with the U.S. Department of Health and Human Services and the Department of Defense includes an option for the government to acquire an additional 500 million doses of BNT162 once the vaccine candidate is proved effective and secures regulatory approval.

It's the largest of a handful of contracts awarded under "Operation Warp Speed," the federal program designed to make and distribute coronavirus vaccines and treatments.

Americans will receive the vaccine free, the companies said.

"Depending on success in clinical trials, today's agreement will enable the delivery of approximately 100 million doses of this vaccine to the American people," HHS Secretary Alex Azar said in a news release.

The BNT162 program, based on BioNTech's mRNA technology and developed by Pfizer, is evaluating at least four experimental vaccines in clinical studies. If those studies are successful, the companies will seek the emergency use authorization from the U.S. Food and Drug Administration in October that would allow it to move into the manufacturing phase, the release said.

"We are also in advanced discussions with multiple other government bodies and we hope to announce additional supply agreements soon," BioNTech chief executive Ugur Sahin said in a news release. "Our goal remains to bring a safe and effective COVID-19 vaccine to many people around the world, as quickly as we can."

Other companies racing to produce a coronavirus vaccine by the end of 2020 or early 2021 include Johnson & Johnson, Moderna, AstraZeneca and Novavax. The U.S. government's funding of vaccine candidates allows room for error in case some are not effective. But experts say the timeline is ambitious because developing a successful vaccine usually is a years-long process.

Pfizer shares jumped more than 3% in morning trading after the deal was announced. BioNTech surged more than 8%.