Moderna, the biotechnology company recognized for its Spikevax COVID-19 vaccine, recently reported its fourth-quarter financial results for February 14. The report highlighted considerable financial challenges as the transition from government contracts to a seasonal commercial market for COVID vaccines continued. Revenue experienced a significant drop of 65.6% year over year, landing at $966 million, although this surpassed the analysts’ consensus expectations of $942 million. Moderna reported a loss of $2.91 per share, which was greater than the projected loss of $2.68 per share.
Moderna is a leading biotech firm engaged in creating and manufacturing mRNA-based medicines and vaccines. This innovative approach includes developing vaccines and therapies for various diseases, including COVID-19, cancer, and rare conditions. Spikevax, its foremost FDA-approved product, played a vital role in the public health response to the pandemic. Now, Moderna is concentrating on diversifying beyond Spikevax to reduce its dependency on the single product. In 2024, it received FDA approval for its respiratory syncytial virus (RSV) vaccine, and its pipeline boasts new vaccines and treatments for rare diseases. Success in these areas and achieving cost efficiencies are critical as revenue declines due to reduced demand for COVID vaccines.
In the quarter, Moderna began transitioning its revenue base as COVID-19 vaccine sales decreased because of evolving market conditions. Sales of Spikevax contributed $923 million, a stark year-over-year decrease attributed partly to the conclusion of advance purchase agreements. Additionally, $15 million in sales were recorded for its RSV vaccine, mRESVIA, although its performance was moderated by competition and market timing challenges. The company also submitted its next-generation COVID vaccine for FDA approval.
Significant cost-cutting efforts were implemented, with a 27% reduction in operating expenses year over year. However, the cost of sales rose to 79% of revenues from 33% previously, mainly due to lower sales and wind-down expenses. Financial results were also impacted by $259 million in costs related to contract terminations.
Moderna’s cash reserves fell to $9.5 billion by year-end from $13.3 billion the previous year, reflecting operational outflows amid continuous investments in research and development (R&D).
Looking forward, Moderna anticipates revenue in the range of $1.5 to $2.5 billion for the upcoming year, indicating expectations of continued declines in COVID-19 vaccine demand. With the seasonal nature of vaccine sales, management expects approximately $200 million of these sales in the first half of the year. The company’s cash position is projected to decrease to around $6 billion by the end of 2025, even with cost management efforts.
The firm is maintaining a high level of investment in R&D, with expenditures projected at $4.1 billion for 2025, which underscores its dedication to broadening its product range. Observers should monitor the acceptance of new products and strategic measures to control costs, which are crucial in Moderna’s continued evolution.
