May 28 (Reuters) - The Trump administration has canceled

a contract awarded to Moderna ( MRNA ) for the late-stage

development of its bird flu vaccine for humans, as well as the

right to purchase shots, the drugmaker announced on Wednesday.

Shares of Moderna ( MRNA ) were flat in after-market trading.

Moderna ( MRNA ) in January was awarded $590 million by the Biden

administration to advance the development of its bird flu

vaccine, and support the expansion of clinical studies for up to

five additional subtypes of pandemic influenza

This was in addition to $176 million awarded by the U.S.

Department of Health and Human Services (HHS) last year to

complete the late-stage development and testing of a

pre-pandemic mRNA-based vaccine against the H5N1 avian

influenza.

HHS told Reuters earlier this year that it was reviewing

agreements made by the Biden administration for vaccine

production.

"The cancellation means that the government is discarding

what could be one of the most effective and rapid tools to

combat an avian influenza outbreak," said Amesh Adalja, senior

scholar at the Johns Hopkins Center for Health Security, adding

that it is the opposite approach Trump took with Operation Warp

Speed to combat COVID-19.

Bird flu has infected 70 people, most of them farm workers,

over the past year as it has spread aggressively among cattle

herds and poultry flocks.

Health Secretary Robert F. Kennedy Jr. has questioned the

use of vaccines and earlier this year drew censure from some in

the U.S. Congress after he suggested in a television interview

that poultry farmers should let the bird flu spread unchecked

through their flocks to study chickens who did not contract it.

Moderna ( MRNA ) said it plans to explore alternatives for late-stage

development and manufacturing of the vaccine.

The company has been banking on revenue from newer mRNA

shots, including its bird flu vaccine and experimental COVID-flu

combination vaccine, to make up for waning post-pandemic demand

for its COVID vaccine.

Moderna ( MRNA ) also said on Wednesday that it had received positive

interim data from a mid-stage trial set up to test the safety

and immunogenicity of its bird flu vaccine targeting the H5

avian influenza virus subtype.