Moderna, the biotech company known for its Covid-19 vaccine, has reported its second-quarter revenue, which surpassed expectations. However, the company has revised its full-year sales guidance downward due to various factors. The lower projected sales in Europe, a competitive market for respiratory vaccines in the US, and the potential for deferred international revenue into 2025 have all contributed to the revision. Moderna now expects its 2024 product revenue to be between $3 billion and $3.5 billion, down from the previous guidance of $4 billion.
This news has caused a decline in Moderna’s stock, with shares falling 10% in premarket trading. The company’s vaccine for respiratory syncytial virus, called mRESVIA, has been approved in the US and has started shipping doses. However, the demand for Covid-19 vaccines has decreased as the world emerges from the pandemic and relies less on protective shots and treatments. Moderna CEO Stephane Bancel has acknowledged the increased competition for both respiratory syncytial virus and Covid-19 vaccines. He mentioned that Pfizer and GSK have already entered the market with their respective RSV shots, with GSK dominating the market last year.
Bancel also highlighted the challenges Moderna faces in securing Covid-19 vaccine supply contracts with European governments. Some countries have informed Moderna that they don’t have the capacity to purchase more vaccines due to budget constraints or existing contracts with other companies. The European Union’s renegotiated contract with Pfizer and BioNTech has also impacted Moderna’s ability to secure sales in the region. Additionally, the ongoing conflict in Ukraine has strained government budgets further.
However, despite these setbacks, Moderna is optimistic about returning to sales growth by 2025 and breaking even by 2026. The company plans to achieve this through the launch of new products. In the second quarter, Moderna reported a loss per share of $3.33, slightly better than the expected loss of $3.39. Revenue for the quarter was $241 million, with a 37% drop in product sales from its Covid-19 shot compared to the same period last year.
The decline in revenue is partly attributed to the expected transition to a seasonal Covid-19 vaccine market, where shots are typically administered in the fall and winter. Despite this, Moderna had a successful spring season in the US for seniors, who were recommended to receive an additional dose of the latest Covid-19 shots.
Moderna has managed to reduce its net loss for the second quarter by cutting costs. The company reported a net loss of $1.28 billion, or $3.33 per share, compared to a net loss of $1.38 billion, or $3.62 per share, in the same period last year. Cost of sales decreased by 84%, primarily due to cost-saving measures and write-downs of unused doses of the Covid-19 vaccine. Research and development expenses increased by 6%, mainly due to personnel costs, while selling, general, and administrative expenses fell by 19%.
Despite the challenges, Moderna’s investor sentiment remains positive, and its shares have risen by nearly 20% this year. The company’s pipeline and messenger RNA platform, used in its Covid-19 vaccine and RSV shot, have instilled confidence in investors. Moderna currently has 45 products in development, with five in late-stage trials. These include a combination shot for Covid-19 and the flu, a stand-alone flu shot, a personalized cancer vaccine in collaboration with Merck, and shots for latent viruses, among others. With these developments, Moderna is poised to make further strides in the biotech industry.
