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The U.S. government will pay US$1.95-billion to buy 100 million doses of a COVID-19 vaccine being developed by Pfizer Inc. and German biotech BioNTech SE if it proves to be safe and effective, the companies said on Wednesday.

The contract is the most the United States has agreed to spend on a vaccine, although previous deals with other vaccine makers were intended to also help pay for development costs.

Pfizer and BioNTech will not receive any money from the government unless their vaccine succeeds in large clinical trials and can be successfully manufactured, according to a Pfizer spokeswoman.

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Under the agreement, the government would also have an option to procure an additional 500,000 doses. Pfizer said the price for the additional half billion doses if ordered would be negotiated separately if the United States orders them.

The vaccine, if successful, will be made available to Americans at no cost, although their health insurance may be charged, the U.S. department of Health and Human Services (HHS) said.

The vaccine has already shown promise in early-stage small studies in humans, producing the type of neutralizing antibodies needed to fight the virus. In those trials, subjects received two doses of the vaccine. That means a 100 million doses would be enough to vaccinate 50 million Americans.

The deal suggests a U.S. price of US$39 for a two-dose regimen.

The Pfizer/BioNTech candidate is one of the most advanced of over 150 vaccines being developed against COVID-19, which has claimed more than 600,000 lives globally and crippled economies.

The vaccine utilizes the chemical messenger RNA to instruct cells to make proteins that mimic the surface of the coronavirus, which the immune system sees as a foreign invader and mounts an attack. Although the technology has been around for years, there has never been an approved messenger RNA (mRNA) vaccine.

The aim is to produce vaccines that can end the pandemic by protecting billions of people from infection or severe illness, and governments have signed deals with drug makers to secure supplies of various candidates. Whether any will succeed remains far from clear.

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The Trump administration has agreed to spend billions of dollars for the development and procurement of potential vaccines under its Operation Warp Speed program.

Other vaccine makers that have signed deals to receive U.S. government funding for their efforts include Moderna Inc., AstraZeneca PLC and Novavax Inc.

Pfizer said it will deliver the doses if the product receives emergency use authorization or U.S. approval after demonstrating safety and efficacy in a large Phase III clinical trial involving up to 30,000 subjects that could begin as early as later this month.

The companies said they could be ready to seek some form of regulatory approval as early as October if trials are successful.

Pfizer and BioNTech currently expect to manufacture up to 100 million doses globally by the end of 2020, and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.

On Monday, the companies agreed to supply the United Kingdom with 30 million doses of the vaccine candidate, but did not disclose a price.

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Pfizer shares were up 4 per cent, while BioNTech’s U.S.-listed shares were up 13 per cent.

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