Abdelrahman
Moderna announced its fourth-quarter earnings on Friday, revealing revenue that exceeded projections, though the company’s losses were greater than anticipated. This comes as the biotech firm continues to reduce expenses amidst declining demand for its Covid-19 vaccine.
This latest report highlights the ongoing struggles faced by the company as it strives to introduce new products and rebound from the significant downturn of its previously thriving Covid business.
Moderna’s shares dropped over 4% in premarket trading on Friday.
The company reported a net loss of $1.12 billion, equating to $2.91 per share for Q4 2024. This starkly contrasts with a net income of $217 million, or 55 cents per share, from the same quarter last year.
Included in this quarterly loss is approximately $238 million related to a non-cash expense triggered by the termination of a contract manufacturing agreement.
In an interview, CFO Jamey Mock emphasized that a critical outcome from the 2024 annual results was a 27% reduction in costs compared to the previous year. Moderna aims to cut costs by an additional $1 billion by the end of 2025.
Moderna has maintained its projections for 2025 product sales, estimating between $1.5 billion and $2.5 billion, predominantly anticipated in the latter half of the year. For the first half, the company expects only $200 million in sales, constrained by seasonal demands for respiratory products that typically peak in autumn and winter.
Earlier in January, Moderna reduced its 2025 sales forecast by nearly $1 billion, leading to significant declines in its share price, which is now down over 20% for the year.
Factors contributing to this revised forecast include heightened competition in the Covid market, decreasing vaccination rates, the timing of manufacturing agreements with various countries, and uncertainties regarding recommendations from CDC advisors for respiratory syncytial virus vaccines.
“If all these potential challenges materialize, we may find ourselves at the lower end of our guidance,” Mock stated to CNBC, indicating the company’s intention to tackle these obstacles.
Here’s a comparison of Moderna’s fourth-quarter performance ending December 31 against Wall Street expectations, based on analyst surveys conducted by LSEG:
- Loss per share: $2.91 vs. an anticipated loss of $2.68
- Revenue: $966 million vs. the expected $942.8 million
Moderna reported fourth-quarter sales of $966 million, which is less than half of the $2.8 billion recorded in the same quarter last year. The majority of this revenue stemmed from Covid vaccine sales, generating $923 million, a 66% decrease from the previous year. This figure included $244 million from U.S. sales and $679 million from international markets.
Analysts had projected the vaccine to achieve $909 million in sales for the quarter, according to estimates from StreetAccount. The decrease in sales was primarily attributed to an earlier launch of the latest version of its Covid vaccine last year, which shifted sales into Q3. The FDA approved this new vaccine three weeks earlier than in 2023, enabling Moderna to effectively meet demand before the fourth quarter.
International Covid vaccine sales declined as Moderna phased out advance purchase agreements with select countries.
The company’s fourth-quarter revenue also encompassed $15 million from U.S. sales of its RSV vaccine, which was introduced to seniors in the fall following approval in May. This product is Moderna’s second authorized offering after its Covid vaccine.
Analysts had anticipated $13 million in sales for the RSV vaccine based on StreetAccount projections. This vaccine has gained approval in several regions, including the U.S., EU, Canada, Norway, Iceland, and Qatar, specifically for adults aged 60 and above.
Moderna is focusing on a robust pipeline built around its messenger RNA technology, which underpins both the Covid and RSV vaccines. The company aims for 10 new product approvals over the next three years.
During the fourth quarter, Moderna submitted three mRNA candidates for regulatory approval, including its advanced Covid vaccine, a combination shot targeting both Covid and flu, and an RSV vaccine for high-risk adults aged 18 to 59. A decision from the FDA on the next-generation Covid vaccine is anticipated in May, with potential expanded approval for the RSV vaccine expected in June, according to Mock.
Additionally, Moderna is working on a standalone flu vaccine, a personalized cancer vaccine in partnership with Merck, and vaccines for latent viruses among other developments. Some of these projects are expected to yield data results later this year.
For Q4, the cost of sales was reported at $739 million, representing a 20% decrease from the same period last year. This figure includes $193 million attributed to writedowns of unused Covid vaccine doses and other associated costs.
Research and development costs dropped by 20% to $1.1 billion compared to Q4 2023, primarily due to reduced clinical and manufacturing expenses related to the Covid, RSV, flu, and combination shot programs. This decline was partially countered by increased spending on new experimental products.
Moreover, selling, general, and administrative expenses decreased by 25% to $351 million from Q4 2023, encompassing costs associated with promoting, selling, and delivering the company’s products and services.
