Moderna Inc. reported a significantly wider-than-expected loss for the third quarter and revised its full-year sales forecast as it adjusts its manufacturing capacity in the post-pandemic era. The COVID vaccine maker recorded a net loss of $3.63 billion, or $9.53 per share, compared to a net income of $1.043 billion, or $2.53 per share, in the same period last year. The loss was primarily driven by non-cash charges amounting to $3.1 billion related to resizing and tax valuation allowances. These charges included write-downs on excess and obsolete COVID products, as well as wind-down costs for contract manufacturing.
In premarket trading, Moderna's stock fell by 4.8%, ending a three-day winning streak. Despite the loss, total revenue for the quarter stood at $1.831 billion, surpassing the FactSet consensus of $1.384 billion but lower than the $3.364 billion generated in the previous year.
Moderna now projects revenues of at least $6 billion for 2023, narrowing its previous range of $6 billion to $8 billion. The company expects a further decline in revenues to around $4 billion in the following year before returning to growth in 2025.
Moderna's Chief Financial Officer, Jamey Mock, stated that the company is determined to break even by 2026. As COVID recedes, Moderna plans to unwind some of the infrastructure it put in place during the pandemic. This includes revising its manufacturing partnerships, reducing inventory, and adjusting its commitment to raw material purchases. Mock explained that these adjustments will make operations more predictable and cost-efficient over time, resulting in substantial savings for the company.
Sales of Moderna's COVID Vaccine Reach $1.8 Billion in Q3
Moderna's COVID vaccine has generated an impressive $1.8 billion in sales during the quarter, with approximately half of that revenue coming from the U.S. market. The company has experienced a significant increase in market share for its Spikevax vaccine, which now stands at 45% for the current fall season compared to 36% during the same period in 2022. Despite the challenges faced in the ongoing vaccination campaign, Moderna remains optimistic about achieving similar vaccination rates as last fall.
Challenges for Moderna Amidst Pfizer's Reduced Outlook
This year has proven to be a difficult one for Moderna, as its stock price has taken a hit, further exacerbated by Pfizer's revised full-year outlook due to lower-than-expected demand for COVID-related products. However, Moderna swiftly reaffirmed its sales guidance of $6 billion to $8 billion for the full year, while acknowledging that accurately projecting vaccination rates for the year still remains uncertain at this stage.
Investor Sentiment Towards Moderna Wanes
Investor sentiment towards Moderna has been lukewarm, particularly within the biotech sector. A recent investor sentiment survey conducted by TD Cowen ranked Moderna as the least-favored large-cap biotech stock. Despite this, the company is focusing on highlighting its pipeline's growth potential and anticipates the launch of up to 15 new products within the next five years.
Exciting Prospects for Moderna's Pipeline
As COVID revenues begin to decrease, Moderna aims to shed light on the promising opportunities within its pipeline. One noteworthy development is its forthcoming vaccine for respiratory syncytial virus (RSV), set to be launched next year. Although GSK PLC and Pfizer already have RSV vaccines on the market, Moderna believes that its ready-to-use pre-filled syringes will simplify the vaccination process and distinguish its product.
Moderna also has its sights set on obtaining regulatory approval for an innovative combination COVID and flu vaccine by 2025. The company recently shared positive interim clinical trial results and commenced late-stage studies for this dual vaccine option.
Additionally, Moderna anticipates releasing valuable data in the fourth quarter on its investigational individualized cancer vaccine, which it is developing in collaboration with Merck & Co. Inc.
Moderna's Stock Performance and Outlook
Year-to-date, Moderna's stock has declined by 57%, presenting a challenging environment for investors. By contrast, the S&P 500 has enjoyed a gain of 10.4% over the same period.
