US vaccine giant Moderna 'suspends' plans to build Sh65b plant in Kenya

Moderna Inc inked a deal in 2022 with the Kenyan government to invest billions of shillings in a facility that would produce up to 500 million vaccine shots a year. [iStsockphoto]

US biotechnology giant Moderna says it has suspended plans to build a vaccine Sh65 billlion plant in Kenya.

The American firm inked a deal in 2022 with the Kenyan government to invest billions of shillings in a facility that would produce up to 500 million vaccine shots a year.

A report by The Financial Times on Thursday, however, said Moderna is yet to buy a plot earmarked for it in a special economic zone at Tatu City in Kiambu County following the suspension of its plans.

The announcement is a huge blow for Kenya which has been seeking to attract investments to grow jobs and support the economy.

The government assured Moderna of several tax breaks and allowed it to more than halve its original planned investment of $500 million to $200 million, according to the FT report.

The report said the company plans have stalled over the purchase of a five to 10-acre plot in Tatu City economic zone. Costs to buy land in the industrial park are about Sh130 million per acre.

In a statement to the Financial Times, Moderna confirmed it had “paused its efforts” to build a vaccine plant in Kenya.

“The demand in Africa for Covid-19 vaccines has declined since the pandemic and is insufficient to support the viability of the factory,” the Financial Times quoted the firm to have said.

Kenya earlier said Moderna's $500 million vaccine plant would have a crucial role to play in the fight against other diseases beyond the Covid-19 pandemic amid a global glut of coronavirus vaccines.

The reported suspension comes amid a global vaccine oversupply that has crept up across a world once desperate for immunisation against the coronavirus, raising fears over the viability of Covid-19 plants in the pipeline.

But Kenyan officials had said the planned vaccine plants including Moderna’s would also produce other vaccines and the glut would not affect the construction plans.

"They will make vaccines…not just Covid ones," health officials said earlier.

The American biotechnology giant also had plans to start filling doses of its Covid vaccine in Africa as early as 2023, following the deal with the Kenyan government.

Moderna had said "the plant is expected to be intended for mRNA therapeutics and vaccines versus being specific to Covid-19".

"We’ve entered into a memorandum of understanding with the Government of the Republic of Kenya to build a state-of-the-art mRNA facility in Africa — the intention would be for this plant to produce mRNA vaccines, including but not limited to Covid-19 vaccines," it said.

Moderna has been developing several other vaccines based on mRNA technology, including for respiratory syncytial virus, HIV and shingles.

Vaccine makers invested in massive production capacity over the COVID period and some of that has come online only after most countries covered much of their populations with two doses.

The global adjustment to living with the virus — with the exception of Covid Zero-practising China and Hong Kong — diluted the urgency for booster shots, according to analysts.