The United States government said on Wednesday it will pay $1.95 billion for Pfizer Inc to produce and deliver 100 million doses of its COVID-19 vaccine candidate in the United States.
The vaccine would be available to the American people for free, according to the government.
The agreement allows the U.S. government to acquire an additional 500 million doses, the Department of Health and Human Services and the Department of Defense said.
Pfizer and its vaccine partner BioNTech SE will receive payment upon the receipt of the doses, following regulatory authorization or approval, according to a statement
The government also can acquire up to an additional 500 million doses.
The U.S. has already ordered experimental shots developed by the University of Oxford and AstraZeneca Plc.
Pfizer shares rose more than 5% in pre-market trading. BioNTech climbed about 7%.
This report contains material from Reuters, The Associated Press, and Bloomberg News.