Shares of Moderna Inc. fell sharply on Monday after the biotech firm projected a steep decline in 2025 revenues, falling below Wall Street expectations.
The company, known for its COVID-19 vaccine, Spikevax, said it expects revenue to range between $1.5 billion and $2.5 billion in 2025, compared to as much as $3.1 billion in 2024 and $19 billion during the peak of the pandemic.
Why It Matters
Moderna's revenue and stock price have steadily declined since global demand for COVID-19 vaccines has dwindled. During 2020 and 2021, the company generated massive revenues, fueled by its breakthrough mRNA technology. However, as vaccination rates stabilized and the pandemic shifted into an endemic phase, sales of Spikevax plummeted.
The company's newer product, an RSV (respiratory syncytial virus) vaccine, has also underperformed, contributing "minimal sales" in 2024. Analysts' concerns were heightened by the company's revised sales forecast for 2024, which projects $3 billion to $3.1 billion, falling at the low end of previous estimates.
What to Know
The announcement sent Moderna shares tumbling by 19 percent to $34.07 in early trading.
CEO Stéphane Bancel said during Monday's announcement that the company will accelerate cost-cutting measures, aiming to reduce cash costs by $1 billion in 2025 and by an additional $500 million in 2026. Despite these efforts, questions remain about whether Moderna can stabilize its financial outlook as it bets on experimental vaccines and other drugs in its pipeline.
Revenue Gap Delays Break-Even to 2028
Monday's announcement highlighted Moderna's struggles to maintain its financial momentum. The company revised its 2025 revenue expectations to a range of $1.5 billion to $2.5 billion, falling far short of Wall Street's consensus of $2.92 billion, according to the financial information company FactSet. Just a year ago, analysts anticipated $5 billion in 2025 revenue.
Moderna's financial challenges are compounded by a slowing adoption of its second product, the RSV vaccine, and an experimental cytomegalovirus (CMV) vaccine that has yet to meet early efficacy milestones. Meanwhile, its combination flu/COVID-19 vaccine is not expected to launch until 2025-26, leaving a significant revenue gap. The jab passed vital scientific checks in June 2024.
Moderna Slashes Research Budget
To conserve cash, Moderna has slashed its research and development budget, cutting long-term spending by 20 percent between 2025 and 2028. The company also delayed its break-even timeline from 2026 to 2028.
What People Are Saying
Sales for the RSV vaccine, called mRESVIA, were "negligible," the company said.
Bernstein investment analyst Courtney Breen told Reuters that Moderna may have to aggressively cut research and development costs to reduce investor worries of a need for an equity raise. "The bumpy ride gets bumpier," she said.
What's Next
Moderna's partnership with Merck on a cancer vaccine shows potential, but it is years away from generating meaningful revenue.
Moderna will outline its fourth-quarter results on Feb. 14, offering a more detailed financial picture and updates on its cost-cutting measures. The company plans to focus on late-stage trials for several experimental vaccines, including its combination flu/COVID vaccine and a CMV vaccine for pregnant women.
This article includes reporting from The Associated Press
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