The setback adds to recent regulatory delays, prompting cautious sentiment among retail investors expecting further downside.

Shares of Moderna Inc. fell over 2% on Wednesday after the U.S. Department of Health and Human Services (HHS) withdrew its funding agreement for late-stage development of the company’s experimental H5 avian influenza vaccine despite positive interim results from early-stage trials.

Moderna’s shares were up 1.01% to $26.31 in after-hours trading.

The department canceled its planned support for developing Moderna's pandemic flu vaccine, mRNA-1018, and revoked its stockpiling purchase rights.

According to the interim results of the Phase 1/2 study, the vaccine candidate from Moderna generated a strong and durable immune response among healthy adults. 

The company said nearly all participants reached antibody levels associated with protection three weeks after their second dose and experienced the vaccine without significant safety issues.

Moderna said it would evaluate various options to advance the program's development and manufacturing stages, supporting its overall pandemic preparedness strategy.

The setback adds to a string of regulatory delays for Moderna. 

Last week, the company withdrew its application for FDA approval of a seasonal flu-COVID combination vaccine, citing the need for additional data. 

Moderna expects to resubmit the application later this year and anticipates potential approval only in 2026.

The move followed recent FDA guidance requiring new clinical trials to support annual COVID-19 booster approvals for healthy individuals under 65, which will likely impact timelines for combination vaccine rollouts.

On Stocktwits, retail sentiment was ‘bearish’ amid ‘low’ message volume.

One user predicted the stock could fall to $12 soon, while another reported closing their $27 call option and expecting a drop to $18.

The stock has declined 38% so far in 2025.

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