Moderna stock falls as sinking Covid vaccine demand drives steep loss

Biotech
Thursday, November 2nd, 2023 2:04 pm EDT

Key Points

  • Q3 Performance:
    • Moderna reported a substantial loss in the third quarter due to a large write-down of unused Covid vaccine doses, which is its only marketable product.
    • The loss per share was $9.53, significantly different from the expected loss of $1.93 per share by analysts.
    • Despite the loss, Moderna’s total revenue for the quarter was $1.83 billion, exceeding Wall Street’s anticipated revenue of $1.40 billion.
    • Moderna’s stock fell 6% in morning trading, and the company’s stock value has dropped over 57% for the year.
  • Restructuring and Scaling Back Production:
    • The company’s loss was primarily attributed to $3.1 billion in non-cash charges related to tax allowances and changing its manufacturing footprint.
    • Moderna’s restructuring efforts aim to make its Covid vaccine profitable in 2024 and beyond by reducing manufacturing capacity, commitments with third-party vendors, and purchase commitments for raw materials.
    • The resizing is seen as a strategic shift from scaling up production during the pandemic to resizing the company for the endemic phase.
  • Outlook and Future Growth Plans:
    • Moderna reiterated its full-year outlook of at least $6 billion in Covid vaccine sales but did not provide a specific range as previously projected.
    • The company expects Covid vaccine trends to follow patterns from the previous year, with U.S. vaccination rates being a key variable for sales.
    • Moderna anticipates approximately $4 billion in sales in 2024, with a focus on global Covid shot sales and the launch of its vaccine against respiratory syncytial virus (RSV).
    • The company aims to shift investor focus from Covid to a pipeline of new vaccines, planning to offer multiple vaccines targeting various conditions such as cancer, heart disease, and respiratory diseases by 2030.

 

The article discusses Moderna’s third-quarter performance, its plans to scale back Covid vaccine production, and its future outlook. Here are the key points:

  1. Q3 Results:
    • Moderna reported a significant loss in the third quarter, primarily due to non-cash charges related to tax allowances and changes in its manufacturing footprint.
    • Loss per share for the quarter was $9.53, not comparable to the expected loss of $1.93 per share by analysts.
    • Despite the loss, the company’s revenue of $1.83 billion exceeded Wall Street expectations, which anticipated $1.40 billion in revenue.
  2. Restructuring Efforts:
    • Moderna’s loss was driven by a $3.1 billion charge related to resizing the company’s operations. This resizing aims to make its Covid vaccine profitable in 2024 and beyond.
    • The restructuring includes reducing manufacturing capacity, adjusting commitments with third-party vendors, and cutting back on purchase commitments for raw materials.
    • Moderna’s CEO, Stéphane Bancel, emphasized the importance of resizing as the company transitions from the pandemic phase to an endemic setting.
  3. Covid Vaccine and Future Plans:
    • Moderna reported a 44% drop in Covid shot sales from the same period last year. Total revenue decreased compared to the third quarter of 2022 when Covid cases were higher in the U.S.
    • The company’s full-year outlook for Covid vaccine sales remained at least $6 billion, but no specific range was provided, unlike the previous projection of $6 billion to $8 billion for 2023.
    • Moderna anticipates that Covid vaccine trends will follow last year’s patterns, with U.S. vaccination rates being a key variable for sales.
  4. Future Growth Strategy:
    • Moderna is shifting its focus away from Covid-related products and aims to expand its vaccine portfolio. The company is developing vaccines for other respiratory diseases and plans to offer vaccines targeting various conditions like cancer and heart disease by 2030.
    • The pipeline includes a vaccine against respiratory syncytial virus (RSV), with a decision from regulators expected in 2024.
    • Moderna is working on a combination vaccine for Covid and the flu, with positive initial results in a mid-stage clinical trial, and aims for regulatory approval in 2025.
    • The company is also developing personalized cancer vaccines and flu vaccines as part of its ambitious growth plans.

Moderna’s financial performance in Q3 showed the impact of changes related to the Covid vaccine business, and the company is now positioning itself to diversify and expand its vaccine offerings beyond the pandemic.

For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/02/moderna-mrna-q3-earnings-report-2023.html

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