Moderna Suspends Plans for Vaccine Production Facility in Kenya Amid Declining Demand

US biotech firm Moderna has decided to put its plans for constructing a vaccine plant in Kenya on hold, signalling a shift away from investing in pandemic preparedness in Africa as the demand for Covid-19 vaccines decreases.

Moderna, headquartered in Boston, had reached an agreement with the Kenyan government a year ago to invest approximately $200 million in a facility capable of producing up to 500 million vaccine doses annually. However, despite efforts from senior officials from both the US and Kenya, including President William Ruto, the project has hit a roadblock.

While the Kenyan government offered Moderna tax breaks and allowed it to reduce its initial investment from $500 million, the company has hesitated to purchase a plot of land in the Tatu City economic zone near Nairobi. The cost of land in this industrial park is approximately $1 million per acre.

In response to queries from the Financial Times, Moderna stated that it has “paused its efforts” to build the vaccine plant in Kenya due to declining demand for Covid-19 vaccines in Africa, rendering the project economically unviable.

The decision by Moderna underscores a broader trend of waning interest in vaccine equity and pandemic preparedness among governments and pharmaceutical companies. Disputes between wealthier and poorer nations further threaten to delay the establishment of a global pandemic treaty, initially set for discussion by the World Health Organization in May.

Alfred Mutua, Kenya’s tourism minister, described the agreement with Moderna as being “put on hold” as both parties assess their needs collaboratively, leaving room for potential future developments.

Moderna’s decision comes amidst its efforts to reassure investors of its capacity to diversify its product portfolio. Despite a market capitalization of nearly $43 billion, down 75% from its peak in late 2021, Moderna aims to expand its product pipeline.

Sales of Moderna’s Covid-19 mRNA vaccine, its sole approved product, are projected to plummet to $3.9 billion this year from a peak of $18.4 billion in 2022. Despite this, no African public health body has procured Covid-19 vaccines since 2022, though 3.1 million doses were delivered last year.

The scarcity of “cold chain” facilities required to store mRNA vaccines at low temperatures remains a significant obstacle to their widespread use in African countries.

While Moderna’s decision may be seen as a setback to Africa’s efforts to reduce its dependence on vaccine imports, initiatives such as Germany’s BioNTech’s manufacturing site in Rwanda and the Coalition for Epidemic Preparedness Innovations’ plans for production capacity in Senegal continue to offer hope for the future.