Modern reported a narrower-than-expected first-quarter loss on Thursday as the corporate's cost-cutting efforts took effect and sales of its Covid vaccine, its only commercially available product, beat estimates.
The results come as Moderna gets closer to launching one other product that’s urgently needed as demand for Covid vaccinations falls worldwide. The biotech company expects U.S. approval for its respiratory syncytial virus vaccine on May 12. If approved, vaccination is predicted to occur within the third quarter.
Shares of Moderna closed greater than 12% higher on Thursday following the outcomes.
Here's what Moderna reported for the primary quarter in comparison with Wall Street's expectations, based on an analyst survey from LSEG:
- Loss per share: $3.07 versus an expected lack of $3.58
- Revenue: $167 million versus expected $97.5 million
“On the [operating expenses] “On the company side, we've made great progress,” Moderna CEO Stéphane Bancel said of the cost cuts on CNBC's “Squawk Box” on Thursday. He added that the biotech company's team “has done an excellent job in resizing the corporate.”
Moderna posted first-quarter revenue of $167 million, with Covid vaccination revenue falling about 90% compared to the same period last year. The company reported revenue of $1.86 billion in the same period last year.
About $100 million came from the U.S., while $67 million came from international markets, primarily in Latin America, Moderna CFO Jamey Mock said in an interview with CNBC.
The company said the decline in sales was partly due to the expected transition to a seasonal Covid vaccine market, where patients typically get their vaccinations in the fall and winter.
Moderna posted a first-quarter net loss of $1.18 billion, or $3.07 per share. That compares with net income of $79 million, or 19 cents per share, in the year-earlier period.
The company reiterated its full-year 2024 revenue forecast of about $4 billion, including revenue from its RSV vaccine. Specifically, Moderna expects only $300 million of these sales to occur in the first half of the year, as respiratory virus season is typically in the second half of the year.
The second quarter will include part of the company's recently announced deal with Brazil to supply 12.5 million Covid vaccines, executives said during a conference call on Wednesday.
Moderna has said it expects to return to revenue growth in 2025 and reach breakeven with new product launches by 2026.
For the first quarter, Mock said the company was “more encouraged by what we're seeing from a productivity perspective” than by the higher sales of its Covid vaccine.
Cost of sales was $96 million in the first quarter, down 88% from the same period last year. This includes, among other things, $30 million in write-downs on unused doses of the Covid vaccine and $27 million in charges related to the company's efforts to reduce its manufacturing footprint.
Research and development costs fell 6% to $1.1 billion in the first quarter compared to the same period in 2023. This decline was primarily due to fewer payments to partners in 2024 and lower clinical development and manufacturing costs, including lower clinical trial expenses for the company's Covid, RSV and seasonal flu vaccinations.
Meanwhile, selling, general and administrative expenses fell 10% to $274 million in the period compared to the first quarter of 2023. SG&A expenses typically include the costs of advertising, selling, and providing a company's products and services.
The company said the decline was partly due to its investments in “digital business capabilities” and increased focus on using AI technologies to streamline operations.
Last month, Moderna announced a partnership with artificial intelligence heavyweight OpenAI that aims to automate nearly every business process at the biotech company.
Mock told CNBC that Moderna has been working with OpenAI for a year. He added that 60 to 70% of the company currently uses an AI chatbot for work.
Moderna has so far managed to boost investor sentiment about its post-Covid approach. Its shares have risen more than 10% this year as confidence in its pipeline and messenger RNA platform, the technology used in Covid vaccinations, has increased.
The biotech company currently has 45 products in development, some of which are in late-stage testing. This includes the combination vaccination against Covid and the flu, which could be approved as early as 2025.
Moderna is also developing, among other things, a stand-alone flu vaccination, a personalized cancer vaccine with Merck and vaccinations against latent viruses.
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