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Biotech is dealing with its latest fallout: the HHS' move to terminate $500 million in mRNA vaccine development. 

Why it matters: The disruption is likely to stymie growth and depress valuations and future investment into mRNA companies.

The latest: This week's funding cuts are already being felt, Harvard Medical School professor and Corner Therapeutics co-founder Jonathan Kagan told Axios Pro in an email.

"When public support disappears, it causes investors and pharma partners to rethink their exposure to certain platforms, especially mRNA," he says. 

"We've seen a shift from long-term optimism to near-term caution, which is dangerous for an industry built on multi-year development cycles."

The intrigue: HHS Secretary Robert F. Kennedy Jr. has voiced critiques of mRNA technology in the past, but vaccine deals kept coming from all corners of the market.

Last month Nordic Capital and Permira announced a deal to take Bavarian Nordic private for 19 billion krone ($3 billion), though the deal is in jeopardy as the vaccine maker's biggest shareholder tries to block it over valuation concerns.

Also in July, Sanofi agreed to buy Vicebio for up to $1.6 billion.

On the venture side, mRNA vax startup Centivax raised $45 million for a universal flu vaccine. 

What they're saying: "Retraction of investment in one area of research for this platform could erode progress and discourage investment in other promising areas of research for it, including cancer and rare diseases," says a Biotechnology Innovation Organization spokesperson.

"The biggest potential ahead of mRNA is beyond vaccines, in its ability to treat disease directly," says Jake Becraft, CEO of mRNA therapeutics startup Strand, which announced a $153 million Series B round this week.

Zoom in: HHS said it is winding down 22 Biomedical Advanced Research and Development Authority award contracts.

Kennedy cited reports that claim to show mRNA vaccines "fail to protect effectively against upper respiratory infections like COVID and flu."

HHS is now shifting funding to "safer, broader vaccine platforms" that Kennedy says would "remain effective even as viruses mutate."

Reality check: Infectious disease specialists have long said mRNA vaccines can reduce serious illness and death, even if they cannot completely prevent illness.

What we're hearing: The funding cuts may not hurt all vaccine manufacturers.

Atlanta-based GeoVax Labs, which develops multi-antigen, MVA-based vaccines, including one for COVID, aligns with Kennedy's priorities.

"We think this bodes well for us potentially," GeoVax CEO David Dodd tells Axios Pro. "We're not anti-mRNA. Our philosophy is ... you need multiple platforms to meet the needs for vaccines and different modalities."

Zoom out: mRNA has been politicized, on both the federal and state level.

"The biggest flaw of mRNA was that its first application was to COVID — the most politically charged disease in modern history," Harvard's Kagan says.

The bottom line: "Many feel that the pandemic's policy, public health, and communications challenges have led to where we are today: an exceptional medical breakthrough being viewed through the entirely wrong lens," Kagan says.

Investors moving cautiously after mRNA funding cuts

The disruption could depress valuations and future investment into mRNA companies.

Illustration of a bandaid shaped like a dollar on a person's shoulder

Biotech is dealing with its latest fallout: the HHS&#x27; move to <a class="gtmContentClick" data-vars-link-text="terminate $500 million" data-vars-click-url="https://www.axios.com/2025/08/05/mrna-vaccine-development-kennedy-funding" data-vars-content-id="67835d4d-4b5d-4a10-beca-622c65d5a5e3" data-vars-headline="Investors moving cautiously after mRNA funding cuts" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2025/08/05/mrna-vaccine-development-kennedy-funding" target="_self">terminate $500 million</a> in mRNA vaccine development. Why it matters: The disruption is likely to stymie growth and depress valuations and future investment into mRNA companies.

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Investors moving cautiously after mRNA funding cuts

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