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    Moderna Inc (MRNA)

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    Business Description

    Moderna, Inc. is a biotechnology company specializing in the development of medicines using messenger RNA (mRNA) technology. The company's mRNA platform is designed to instruct the body’s cells to produce proteins that offer therapeutic or preventive benefits, targeting a wide range of diseases including infectious diseases, immuno-oncology, rare diseases, and autoimmune diseases . Moderna's first commercial product is the COVID-19 vaccine, marketed as Spikevax®, which has been adapted to address emerging SARS-CoV-2 strains . The company offers vaccines for COVID-19, respiratory syncytial virus (RSV), and seasonal flu, and is advancing a pipeline of 45 development programs to diversify its product offerings .

    1. COVID-19 Vaccine (Spikevax®) - Developed to combat COVID-19, this vaccine has been a major revenue driver and is adapted to address emerging SARS-CoV-2 strains .
    2. Respiratory Syncytial Virus (RSV) Vaccine (mRESVIA®) - Approved in 2024, this vaccine is expected to contribute to revenue as it launches in the U.S. and other markets .
    3. Seasonal Flu Vaccine - Targets seasonal influenza, aiming to provide preventive benefits against flu strains.
    4. Combination Vaccine for Flu and COVID-19 - Combines protection against both flu and COVID-19, offering a comprehensive solution for respiratory illnesses.
    5. Pipeline of Development Programs - Includes 45 development programs with 40 candidates in clinical studies, focusing on diversifying product offerings beyond COVID-19 .

    Q3 2024 Summary

    Initial Price$117.05July 1, 2024
    Final Price$63.93October 1, 2024
    Price Change$-53.12
    % Change-45.38%

    What went well

    • Moderna expects up to 10 product approvals over the next 3 years, including key vaccines like CMV and RSV, which they believe will drive sales growth.
    • They are making progress on cost-saving initiatives, expecting to decrease annual R&D expenses by $1.1 billion by 2027, improving financial efficiency.
    • Moderna plans to launch a combination flu-COVID vaccine in 2026, aiming to protect high-risk individuals and seeing significant potential in this market.

    What went wrong

    • Delays in Key Product Launches May Impact Revenue Growth: The company does not expect its combination flu COVID vaccine to launch in 2025, pushing potential revenue from this product to 2026 or later. They have not included any revenue from certain submissions in their 2025 guidance. ,
    • Expected Decline in Rest of World Revenues in 2025: Moderna anticipates a decrease in ex-U.S. revenues in 2025 before growth resumes in 2026, potentially leading to an overall revenue decline next year. ,
    • Legal Risks Due to Ongoing Litigation: The company is facing a lawsuit from GSK over COVID-19 vaccine patents, which could have financial implications if not resolved favorably.

    Q&A Summary

    1. COVID Vaccine Sales Outlook
      Q: Why is Q4 COVID vaccine revenue declining significantly?
      A: The company anticipates a 60% to 80% decline in Q4 COVID vaccine sales compared to Q3 due to earlier vaccinations and shifting dynamics across retail, IDN, and government channels. They observed an early start to the season with vaccinations peaking and now declining. Efforts are underway to boost vaccinations ahead of Thanksgiving and Christmas, but the overall impact remains uncertain.

    2. RSV Vaccine Market Potential
      Q: What is the outlook for the RSV vaccine market?
      A: The RSV vaccine market has been much lower than anticipated, impacted by new CDC guidelines released in June. The company expects a potential uptick in Q1 as inventory levels adjust and believes contracting in a full season next year will improve their position. They remain confident in the long-term importance of RSV vaccines, particularly outside the U.S., where approvals are progressing.

    3. Flu-COVID Combo Vaccine Approval Timing
      Q: When will the flu-COVID combo vaccine be available?
      A: Due to timing considerations, the company will not use a priority review voucher for the flu-COVID combo vaccine, as it would not align with the contracting season. They plan to submit for approval this year but do not expect the product to impact the 2025 flu season. They anticipate potential approval and market impact in 2026, aiming to protect high-risk populations with a combination vaccine.

    4. Individualized Neoantigen Therapy (INT) Progress
      Q: What is the status of the INT program and manufacturing facility?
      A: The INT program is accelerating with a new Phase III trial in non-small cell lung cancer. The manufacturing facility in Massachusetts is on track for completion by year-end, and once operational, clinical work will transition there. Bridging studies will be conducted, and manufacturing capacity is not a primary constraint for expanding the INT program into additional indications.

    5. Ex-U.S. Revenue and Contracts
      Q: How significant are ex-U.S. COVID revenue contracts?
      A: While specifics are undisclosed, the company has established contracts with countries like the UK, Canada, Australia, and Brazil. Ex-U.S. revenues are expected to decline in 2025 but then uptick in 2026 as new products are added and minimum purchase commitments grow over time.

    6. Cytomegalovirus (CMV) Vaccine Trial Updates
      Q: When can we expect CMV vaccine trial results?
      A: The CMV vaccine trial is progressing steadily with case accrual. If the Data Safety Monitoring Board (DSMB) recommends unblinding at the interim analysis due to meeting efficacy criteria, results will be shared promptly. Otherwise, the final analysis could happen quickly, and communication will depend on the timing and conditions.

    7. Legal Liabilities and Litigation
      Q: What's the company's stance on the GSK lawsuit?
      A: The company will not comment on the merits of GSK's case but notes that such lawsuits are not uncommon during market formation around new technology. They are prepared to defend themselves and look forward to presenting their case at trial as scheduled.

    8. Orphan Disease Pipeline Developments
      Q: What's the path forward for the orphan disease programs?
      A: Pivotal trials for MMA and PA are moving forward, with plans to use a biomarker for approval in MMA, potentially accelerating timelines. The goal is to launch these products in the 2026+ timeframe, with the possibility of earlier approval if patient accrual is rapid.

    9. Financial Impacts: Reserve Returns
      Q: What are the details on reserve returns from last season?
      A: The company released about $140 million in the quarter by reducing reserves, lowering the prior estimate from over $500 million to approximately $400 million. They are applying learnings to forecast the anticipated product returns reserve for this season and will monitor vaccination rates to adjust projections.

    10. Impact of Election Results on Vaccine Use
      Q: Will the change in administration affect vaccine use in the U.S.?
      A: The company believes their mission aligns with public health goals and will continue to collaborate with government leaders regardless of administrative changes. They aim to reassure confidence and focus on delivering innovative medicines to improve health outcomes.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Stéphane BancelChief Executive OfficerOctober 2011Stéphane Bancel has served as the CEO of Moderna since October 2011. Previously, he was CEO of bioMérieux SA and held roles at Eli Lilly. He holds degrees from École Centrale Paris, University of Minnesota, and Harvard Business School .
    Jerh CollinsChief Technical Operations and Quality OfficerOctober 2022Jerh Collins joined Moderna in October 2022 and has been in his current role since January 2023. He previously worked at Novartis from 1993 to 2022 .
    Kate CroninChief Brand OfficerJuly 2021Kate Cronin joined Moderna in July 2021. She oversees communications, branding, and marketing. Previously, she was Global CEO at Ogilvy Health .
    Tracey FranklinChief Human Resources OfficerOctober 2019Tracey Franklin joined Moderna in October 2019. She oversees talent and organizational strategy. Previously, she worked at Merck & Co. from 2004 to 2019 .
    Stephen Hoge, M.D.PresidentJanuary 2013Stephen Hoge, M.D., joined Moderna in January 2013 and has been President since February 2015. He oversees R&D and early commercial efforts. Previously, he was a Partner at McKinsey & Company .
    Shannon Thyme KlingerChief Legal Officer and Corporate SecretaryJune 2021Shannon Thyme Klinger joined Moderna in June 2021. She oversees legal matters and serves as President of the Moderna Charitable Foundation. Previously, she worked at Novartis .
    James MockChief Financial OfficerSeptember 2022James Mock joined Moderna in September 2022. He oversees financial functions. Previously, he was CFO at PerkinElmer and held various roles at General Electric .

    Questions to Ask Management

    1. Given the delays in securing full contracting seasons, how do you plan to maximize sales of your approved products, such as Spikevax and mRNA-1345, especially in light of the competitive environment in the U.S. COVID-19 vaccine market?
    2. Can you provide detailed insights into your reserve return assumptions for this winter season, particularly considering the $500 million-plus reserve from last winter that was adjusted down to approximately $400 million?
    3. With the purchase of the Norwood campus impacting your capital expenditures, how will this acquisition affect your cash position and cost-saving initiatives, and how do you plan to reconcile this with your goal of ending 2024 with approximately $9 billion in cash and investments?
    4. Considering the timing challenges with your flu-COVID combination vaccine and the decision not to use a priority review voucher, how will this impact your ability to capture market share in the 2025 flu season, and what strategies are you implementing to mitigate potential revenue gaps?
    5. Given the late approval of your RSV vaccine relative to the contracting season, how confident are you in achieving significant market share next year, and what realistic expectations should investors have regarding your position in the RSV vaccine market?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateAugust 1, 2022
    End Date/DurationNo expiration date
    Total additional amount$3.0 billion
    Remaining authorization$1.7 billion as of September 30, 2024
    DetailsThe program aims to return capital to shareholders, improve earnings per share, and manage capital structure. The timing and number of shares repurchased depend on various factors, including price and market conditions.

    Past Guidance

    Q3 2024 Earnings Call

    • Issued Period: Q3 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Net Product Sales: $3 billion to $3.5 billion, implying Q4 sales of $0.8 billion to $1.3 billion .
      2. U.S. Q4 Product Sales: $200 million to $500 million .
      3. International Q4 Product Sales: $600 million to $800 million .
      4. Cost of Sales: 40% to 45% of product sales .
      5. R&D Expenses: $4.6 billion to $4.7 billion .
      6. SG&A Expenses: Approximately $1.2 billion .
      7. Taxes: Negligible .
      8. Capital Expenditures: Approximately $1.2 billion .
      9. Cash and Investments: Approximately $9 billion .

    Q2 2024 Earnings Call

    • Issued Period: Q2 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Net Product Sales: $3.0 billion to $3.5 billion .
      2. Cost of Sales: 40% to 50% of product sales .
      3. R&D Expenses: Approximately $4.5 billion .
      4. SG&A Expenses: Approximately $1.3 billion .
      5. Taxes: Negligible .
      6. Capital Expenditures: Approximately $0.9 billion .
      7. Year-End Cash Balance: Approximately $9 billion .

    Q1 2024 Earnings Call

    • Issued Period: Q1 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Net Sales: Approximately $4 billion .
      2. Cost of Sales: Approximately 35% of product sales .
      3. R&D Expenses: Approximately $4.5 billion .
      4. SG&A Expenses: Approximately $1.3 billion .
      5. Taxes: Negligible .
      6. Capital Expenditures: Approximately $0.9 billion .
      7. Cash and Investments: Approximately $9 billion .

    Q4 2023 Earnings Call

    • Issued Period: Q4 2023
    • Guided Period: FY 2024
    • Guidance:
      1. Net Sales: Approximately $4 billion .
      2. Cost of Sales: Approximately 35% of product sales .
      3. R&D Expenses: Approximately $4.5 billion .
      4. SG&A Expenses: Approximately $1.3 billion .
      5. Taxes: Negligible .
      6. Capital Expenditures: Approximately $0.9 billion .
      7. Cash Position: Approximately $9 billion .

    Latest news

    Recent developments and announcements about MRNA.

    Financial Reporting

      Earnings Report

      ·
      Jan 13, 2025, 1:45 PM

      Moderna, Inc. has released its preliminary financial results for the fiscal year ended December 31, 2024. The company reported product sales of $3.0 to $3.1 billion (unaudited) and expects to have approximately $9.5 billion in cash, cash equivalents, and investments as of the end of 2024. Looking ahead to 2025, Moderna projects revenue between $1.5 billion and $2.5 billion, primarily from Spikevax and mRESVIA vaccine sales, with most revenue expected in the second half of the year. The company also plans to reduce cash cost expenses by $1.0 billion in 2025 and anticipates an additional $0.5 billion in cost savings in 2026. By the end of 2025, Moderna expects to have approximately $6.0 billion in cash and investments.