US will pay $2.1 BILLION to Sanofi and GSK for 100 million doses of their experimental coronavirus shot in largest vaccine deal to-date

The US government will pay $2.1 billion to Sanofi SA and GlaxoSmithKline Plc for COVID-19 vaccines to cover 50 million people and to underwrite the drug makers' testing and manufacturing, the companies said on Friday.

The award is the biggest yet from 'Operation Warp Speed,' the White House initiative aimed at accelerating access to vaccines and treatments to fight COVID-19, the respiratory disease caused by the novel coronavirus.

Operation Warp Speed is headed up by Moncef Slaoui, a former GSK executive who is still not employed by the federal government, but working on contract at the helm of the vaccine initiative. 

He took the job on the condition that he not have to give up his shares in GSK, which rose two percent in premarket trading following the Friday announcement. Sanofi was up a little less than one percent before the bell.  

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The US signed a $2.1 billion deal with Sanofi and GlaxoSmithKline to get 100 million doses of the coronavirus vaccine the companies are developing (pictured) 

The deal, announced by the US Department of Health and Human Services (HHS) and Department of Defense, works out at a cost of around $42 per person inoculated.

That is almost identical to the $40 per patient the US agreed to pay Pfizer and BioNTech when it inked a nearly $2 billion deal for 50 million courses of that potential vaccine last week.

The Sanofi-GSK deal is for 100 million doses, at two per person, and gives the government an option to purchase an additional 500 million doses at an unspecified price. Sanofi and GSK plan to start clinical trials for the vaccine in September.

Sanofi executive Clement Lewin said the companies had not yet agreed with the government on a specific price for the additional doses.

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French drugmaker Sanofi is slated to reap the majority of the profits from the shot it is making with British partner GSK 

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Operation Warp Speed is headed up by Moncef Slaoui, a former GSK executive working for the US government on contract 

GSK said in a statement that more than half of the total funding will go into further development of the vaccine, including clinical trials, with the remainder used for a manufacturing ramp-up and delivery of doses.

The two companies' inoculation is combination of a vaccine based on Sanofi's flu shots and a complementary technology from GSK called an adjuvant, designed to improve the vaccine's potency.

Sanofi will receive the bulk of the proceeds from the deal.

It marks the second contract for the Franco-British pair's vaccine candidate after they agreed earlier this week to supply 60 million doses to the British government.

Reuters reported last week that Pfizer's deal was expected to set a pricing benchmark for future deals between drugmakers and governments.

Moderna Inc and Pfizer began two 30,000-subject trials of COVID-19 vaccines on Monday that could clear the way for regulatory approval and use by the end of 2020.