Moderna Reports Profits Exceeding Predictions, Yet Analysts Skeptical About Sustainability of Sales Surge

Moderna Reports Profits Exceeding Predictions, Yet Analysts Skeptical About Sustainability of Sales Surge

Dive Brief:

  • On Thursday, Moderna announced its third quarter sales for the COVID-19 vaccine, which significantly surpassed analyst predictions. However, the company opted not to adjust its financial outlook for the year, indicating a potential revenue drop as 2024 concludes.
  • During the period from July to September, sales of the COVID vaccine Spikevax reached .8 billion, exceeding Wall Street expectations by approximately 0 million. Moderna anticipates that total revenue for the year will be in the range of billion to .5 billion.
  • The company also reported its first revenue from mResvia, its newly launched vaccine for respiratory syncytial virus (RSV), but the million recorded fell significantly short of the million forecast. Moderna attributed this shortfall to the timing of mResvia’s approval and subsequent usage recommendations.

Dive Insight:

Moderna has been facing challenges due to the diminishing market for its COVID vaccine, a key revenue source that previously boosted its financial standing and allowed for increased spending.

With sales on the decline, the biotech firm is implementing budget cuts. In September, Moderna announced its intention to discontinue five drug development projects and reduce R&D expenditures by 20%. Company leaders also indicated a more cautious approach towards investing in new vaccines and therapies for rare diseases.

The better-than-expected revenue report provided some short-term relief, but analysts suggest this increase was largely due to accelerated sales related to the earlier approval of this year’s updated vaccine formulation compared to the previous year. Moderna released twice as many doses to the market in the week following approval versus 2023.

“We hesitate to label this as a beat, given that the full year 2024 revenue guidance wasn’t raised, and the sales seem to have been advanced into August and September,” noted Myles Minter, an analyst with William Blair, in a client communication on Thursday.

Mani Foroohar, an analyst at Leerink Partners, summed up his thoughts succinctly, asking, “When is a beat not a beat?”

For the current year, Moderna’s product sales have reached .2 billion, suggesting a fourth quarter performance that will range between 0 million and .5 billion.

Shares of Moderna initially climbed as much as 9% early Thursday but settled to about a 1% increase.

mResvia, which received FDA approval at the end of May, is anticipated to be Moderna’s next significant offering. Nevertheless, the company is confronted with considerable competition from GSK and Pfizer, both of which market their own RSV vaccines. Early-year contracts between these pharmaceutical companies, wholesalers, and pharmacies have created a substantial amount of RSV vaccine inventory, which Moderna has indicated is constraining sales for mResvia.

“Depleting that inventory is taking a considerable amount of time,” stated Moderna CEO Stéphane Bancel during a conference call on Thursday.

GSK and Pfizer have both noted declines in their vaccine sales compared to the same period last year, attributing this trend to more limited usage recommendations from the CDC. Bancel acknowledged that mResvia has been similarly affected, alongside the efforts to prioritize COVID vaccinations.

Following in the footsteps of GSK and Pfizer, Moderna plans to broaden the audience for its vaccine beyond the currently approved older adult demographic. On Thursday, the company revealed it would utilize a priority review voucher to expedite the FDA’s assessment of mResvia for high-risk adults aged 18 to 59.

Additionally, Moderna announced changes in its leadership, stating president Stephen Hoge will oversee the company’s commercial operations, confirming prior reports from Bloomberg that Bancel would be transitioning from those responsibilities.