Moderna shares hit by quarterly loss and waning Covid vaccine demand

Moderna slumped to a far bigger quarterly loss than expected and delivered a disappointing sales forecast, sending shares in the Covid-19 vaccine maker down as much as 18 per cent.

The Boston-based biotech group, which was one of the pharmaceutical industry’s biggest winners from the coronavirus pandemic, reported a third-quarter loss of $3.6 billion (€3.4 billion), or $9.53 a share, far worse than the $1.79 a share expected by analysts.

Just over $3 billion of the loss stemmed from charges related to deferred tax allowances and the scaling back of the company’s vaccine manufacturing. But Moderna said that waning demand for Covid vaccines in the US meant its full-year sales would be at least $6 billion, the lower end of its previous guidance and below analysts’ forecast for $6.6 billion.

Modern shares, which have fallen more than 50 per cent this year, plunged as much as 18 per cent at the start of trading in New York before recovering to trade down 9 per cent.

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In 2024, Moderna expects sales of $4 billion, mostly in the second half of the year, when it hopes to launch a vaccine to protect against respiratory syncytial virus, competing against GSK and Pfizer. Moderna predicted it would return to growth in 2025 and would break even in 2026.

Analysts at William Blair had forecast revenues of $5.1 billion for 2024. “While we see the higher-than-expected market share favourably, the significant bottom-line miss of minus $9.53 per share and the low 2024 revenue guidance gives us pause,” they noted.

Jamey Mock, Moderna’s chief financial officer, said he expected the Covid vaccination market to grow over time, fuelled by the ageing population in the US and the future approval of vaccines that combine flu and Covid shots.

He added that the cuts in contracts with outsourced manufacturers and the write-offs of raw materials would set the company up to improve its gross margins.

“We know that volume is lower moving forward, and we wanted to go out and proactively restructure that,” he said. “We exercised pretty quickly in the third quarter.”

The non-cash tax charges of $1.7 billion followed accounting guidance because the company expected to be lossmaking for the next couple of years, he said.

But the vaccine maker took market share from Pfizer in the US Covid market, from 36 per cent in the autumn vaccination season of 2022 to 45 per cent this year.

This helped Moderna beat sales expectations in the third quarter. It reported sales of $1.8 billion, higher than the consensus forecast of $1.3 billion, but a 44 per cent drop from the same quarter the year before.

Pfizer slashed its forecast for its Covid vaccine earlier this month by about $2 billion and announced inventory charges and other write-offs of $900 million.

Mock said Moderna’s vaccine was partly proving more attractive because it could be delivered in a pre-filled syringe, making it easier to administer.

Moderna also said it had invested in marketing campaigns, including using the “voices of credible influencers”, and re-engaging with customers; for example, those who had deferred boosters owing to recent infections. --Copyright The Financial Times Limited 2023