Moderna scales back vaccine ambitions as COVID shot revenue plunges

 

Moderna is dialing back its plans for new vaccines, shelving several key projects as it grapples with a sharp slowdown in COVID shot sales.

Why it matters: The company came to the world's rescue during the pandemic, but the pharmaceutical industry is still a what-have-you-done-for-me-lately business.

Between the lines: Moderna plans to "slow down the pace of new R&D investment, and build our commercial business," CEO Stéphane Bancel said in a statement.

It'll reduce annual R&D expenses from $4.8 billion in 2024 to $3.6B-$3.8B in 2027, including by ditching several programs.

The big picture: The company had been using the initial windfall of revenue it reaped from COVID shots to invest in new vaccines, hoping to develop a sustainable pipeline of future products.

It expects 10 to win approval in the next three years, including a combination flu-COVID vaccine.

Yes, but: Many of its future vaccines aren't moving quickly enough to bolster the top or bottom line.

The company's second-quarter revenue totaled $241 million, a 43% drop from a year earlier, which it said was "primarily attributable to decreased sales of the Company's COVID-19 vaccine."

The upshot is that Moderna isn't expected to turn a profit until 2028, according to a research note by Jefferies analyst Michael Yee cited by CNBC.

The impact: Moderna's stock fell over 12% Thursday, having tumbled from its all-time high above $449 in September 2021 — a wipeout of nearly $170 billion of market value over the three years.

The intrigue: In 2020, tackling COVID was a one-way ticket to a financial windfall.

But now the industry's obsession has moved on — most notably to lucrative weight-loss medications, which have triggered a sales and stock boom for the likes of Eli Lilly and Novo Nordisk.

Lilly today announced its latest move to capitalize on demand for its GLP-1 anti-diabetes and anti-obesity drugs: an $800 million investment in an Ireland factory to boost production of the treatments.

The bottom line: Moderna's technology is promising, but COVID vaccines are no longer enough to sustain the full scale of its R&D ambitions.

https://www.axios.com/2024/09/12/moderna-covid-vaccines-rsv-flu