The headquarters of Moderna Inc. in Cambridge, Massachusetts, USA, on Tuesday, March 26, 2024.
Adam Glanzman | Bloomberg | Getty Images
Modern On Thursday it reported second-quarter revenue that beat expectations but cut full-year sales guidance, citing lower-expected sales in Europe, a “competitive environment” for respiratory vaccines in the U.S. and the possibility of deferring international revenue to 2025 .
The biotech company now expects 2024 product revenue to be between $3 billion and $3.5 billion, down from previous guidance of $4 billion.
The company’s shares fell more than 20% on Thursday.
The company began shipping doses of its respiratory syncytial virus vaccine, called mRESVIA, to the US after it was approved in May for older adults. It is Moderna’s second commercially available product after the Covid vaccine, which has seen demand plunge as the world emerges from the pandemic and relies less on protective vaccines and treatments.
Moderna CEO Stephane Bancel told CNBC that there has been “more competition” for both RSV and Covid vaccines. He noted that mRESVIA is the third RSV shot to enter the market after shots from Pfizer and GSKthe latter of which dominated the market last year.
He added that “we’ve had quite intense discussions with governments across Europe” to source Covid vaccines from Moderna.
But “some countries, just last week, told us that because of a very limited budget … they just can’t afford to buy more vaccine than they need because they already have” another contract, Bancel said.
Refers to the European Union massive renegotiated Covid vaccine supply contract with Pfizer and its German partner BioNTech. He also pointed to the ongoing war in Ukraine, which is straining state budgets.
However, Moderna expects to return to sales growth in 2025 and break even by 2026, with new product launches, Bancel said.
Here’s what Moderna reported for the second quarter compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Loss per share: $3.33 versus an expected loss of $3.39
- Income: $241 million vs. $132 million expected
The company posted revenue of $241 million for the second quarter, with sales of products from the Covid response down 37% from the same period a year ago. Moderna reported revenue of $344 million in the prior period.
The company said the revenue decline came in part from an expected shift to a seasonal Covid vaccine market, where patients typically get their shots in the fall and winter. But Bancel said Moderna had a “good spring season” in the US for seniors who are being advised to get an extra dose of the latest round of Covid vaccines.
Moderna posted a net loss of $1.28 billion, or $3.33 per share, for the second quarter. That compares with a net loss of $1.38 billion, or $3.62 per share, reported for the year-ago period.
Bancel said the company lost less than Wall Street expected in part because of its progress in cutting costs.
Moderna had “slightly more sales than expected, but big cost savings ahead of what the Street expected,” he said. “That’s why I’m really happy with the progress we’re making on both fronts.”
Cost of sales was $115 million, down 84% from the same period last year. That includes $14 million in write-offs of unused doses of the Covid vaccine and $55 million in charges related to the company’s efforts to reduce its manufacturing footprint, among other costs.
Research and development expenses for the second quarter increased 6% to $1.2 billion compared to the same period in 2023. This increase was primarily due to personnel costs, including higher headcount.
Meanwhile, SG&A expenses for the period fell 19% to $268 million compared to the second quarter of 2023. SG&A expenses typically include the cost of promoting, selling and delivering products and services of a company.
Moderna has so far managed to support investor sentiment on its post-Covid trajectory. Its shares have risen nearly 20% this year on growing confidence around its messenger RNA pipeline and platform, which is the technology used in the Covid vaccine and the RSV vaccine.
The biotech company currently has 45 products in development, five of which are in late-stage trials. They include the combination shot targeting Covid and flu, which could win approval as early as 2025.
Moderna is also developing a standalone flu vaccine, a personalized cancer vaccine Merck and shots for latent viruses, among other products.
