modern The first-quarter loss reported on Thursday was narrower than expected as the company carried out its cost-cutting efforts and sales of its only commercial product, the coronavirus vaccine, exceeded expectations.
The results come as Moderna is one step closer to bringing another product to market, which it desperately needs as global demand for COVID-19 vaccines plummets. The biotech company expects U.S. approval of its respiratory syncytial virus vaccine on May 12.
Moderna’s first-quarter report compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Loss per share: $3.07, expected loss of $3.58
- income: $167 million vs. $97.5 million expected
“We’ve made tremendous progress as a company (operating expenses),” Moderna CEO Stéphane Bancel said Thursday of the cost cuts on CNBC’s “Squawk Box.” He added that the biotech company’s team “It’s done a great job resizing the company.”
The biotech’s first-quarter sales were $167 million, with Covid vaccine revenue down about 90% from the same period last year. Moderna reported revenue of $1.86 billion in the same period last year.
Moderna Chief Financial Officer Jamey Mock said in an interview with CNBC that about $100 million came from the United States and $67 million from international markets, mainly Latin America.
The company said the revenue decline was due in part to an expected transition to a seasonal COVID-19 vaccine market, with patients typically getting vaccinated in the fall and winter.
Moderna reported a first-quarter net loss of $1.18 billion, or $3.07 per share. This compares with net income of $79 million, or 19 cents per share, in the same period last year.
The company reiterated its full-year 2024 sales guidance of about $4 billion, which includes revenue from its RSV vaccine. Notably, the company expects sales of just $300 million in the first half of the year, as respiratory virus season typically occurs in the second half of the year.
Moderna said it expects to resume sales growth in 2025 and achieve breakeven in 2026 as new products are launched.
Mock said that in the first quarter, the company “saw something more encouraging from a productivity perspective” than the increase in COVID-19 vaccine sales.
Cost of sales in the fourth quarter was US$96 million, down 88% from the same period last year. This includes a $30 million write-down on unused COVID-19 vaccine doses and a $27 million charge related to the company’s production scale-down.
Research and development expenses fell 6% to $1.1 billion in the first quarter compared with the same period in 2023. Spending on trials reduces for the company’s Covid, RSV and seasonal flu vaccines.
Meanwhile, selling, general and administrative expenses for the period fell 10% to $274 million compared with the first quarter of 2023.
The company said part of the decrease was due to its investments in “digital business capabilities” and a greater focus on using artificial intelligence technology to streamline operations.
Last month, Modena declare Partnering with AI heavyweight OpenAI, it aims to automate nearly all business processes for biotech companies.
Mock told CNBC that Moderna has been working with OpenAI for the past year. He added that 60% to 70% of the company’s employees currently use artificial intelligence chatbots to work.
So far, Moderna has managed to boost investor confidence in its path forward post-COVID. The company’s shares are up more than 10% this year on growing confidence in its pipeline and messenger RNA platform, the technology used in its Covid vaccine.
Moderna currently has 45 products in development, including some in late-stage trials. These include Moderna’s combination vaccine against COVID-19 and influenza, which could be approved as soon as 2025.
Moderna is also developing products such as a standalone flu vaccine, a personalized cancer vaccine in partnership with Merck and a vaccine against latent viruses.
About The Author
