(Bloomberg) -- Moderna Inc.’s post-pandemic future was thrown into question Thursday after it disclosed multiple setbacks that disappointed investors.
The biotech company has been largely shut out of the Covid vaccine market in Europe and expects low sales there. It’s facing increased competitive pressure in the US, leading to a disappointing launch of its new RSV vaccine.
The obstacles prompted the company to reduce its sales expectations for the year. The shares fell a record 21% on Thursday, erasing their 2024 gains.
The Cambridge, Massachusetts-based company is trying to manage the decline of its Covid vaccine business as it spends billions to develop new uses for mRNA technology. While Moderna has added an RSV vaccine to its portfolio, how soon investors can expect additional products that could boost sales — including a flu shot and highly-anticipated cancer vaccine — remains unclear.
Despite cost cuts, Moderna posted a second straight quarterly loss. It now sees 2024 sales ranging between $3 billion and $3.5 billion, down from its previous outlook of about $4 billion, according to a second-quarter earnings statement. The company has said it doesn’t expect to break even until 2026.
The forecast cut “heightens concerns, given Moderna is already running net losses and raises doubt about hitting profitability and cash burn goals,” Jefferies analyst Michael Yee said in a note.
Revenue for the quarter was $241 million. While that’s down about 30% from the same period a year ago, it surpassed analysts’ expectations. The company gets the bulk of its sales in the second half of the year when people seek Covid shots to prepare for the colder months and the rise of most respiratory infections.
What Bloomberg Intelligence Says:
Moderna’s reduced 2024 sales guidance of $3-$3.5 billion, from $4 billion at the end of 1Q, may still not be enough, given vaccine fatigue and the competitive nature of the nascent US market. The lack of any commentary on the potential sales of its mRESVIA RSV vaccine is also a concern.
— BI analyst Sam Fazeli. Read the research here.
Moderna Chief Financial Officer James Mock attributed the sharp year-on-year sales decline to the fact that some 2022 vaccine orders were included in last year’s figures. The quarter’s sales beat expectations because more people are getting immunized than had been anticipated, he said.
“There’s been a steady amount of vaccinations that was more than we had assumed in our revenue guidance,” he said in an interview.
‘Very Low’
Moderna has been in discussions to sell its Covid shot in Europe, where Pfizer Inc. and its partner, BioNTech SE, already have a deal in place. Based on recent discussions, Moderna said it now expects “very low” sales in the region. The company also cut its revenue guidance for the year because some international sales are tied to vaccination rates and may be deferred to next year, according to Mock.
After the May US approval of its RSV vaccine in older adults, Moderna began deliveries in July. But new data presented in June showed the efficacy of Moderna’s shot fell sharply over time and was lower than rival vaccines.
The results could raise doubts over how much the product will financially benefit Moderna, which was third to the market after Pfizer and GSK Plc introduced vaccines last year for RSV, an illness that affects elderly adults and babies most severely.
On the earnings call, Mock said Moderna’s RSV launch this year is “not turning out as we expected,” in part because competitors had already negotiated some contracts. Moderna is hoping to capture a “more fair market share” in 2025, Mock said.
The company is investigating other ways to develop or use the mRNA technology that underpins its Covid vaccine. In July, Moderna secured nearly $200 million from the US government to speed development of an mRNA vaccine for pandemic influenza as a dangerous strain of bird flu sweeps through US dairy farms.
(Updates with shares in third paragraph.)
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