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Contemporary on Thursday saw a narrower-than-expected first-quarter loss as the company made cost-cutting efforts and sales of its Covid vaccine, the only product on the market, beat estimates.
The results come closer to launching another much-needed product amid falling demand for Covid vaccines around the world. The biotech company expects a vaccine against respiratory syncytial virus to be approved in the U.S. on May 12. If positive, the vaccine is expected to be launched in the third quarter.
Here’s Moderna’s first-quarter report compared to Wall Street expectations, based on a survey of analysts conducted by LSEG:
- Loss per share: USD 3.07 against an expected loss of USD 3.58
- Income: USD 167 million against the expected USD 97.5 million
The biotech company reported first-quarter sales of $167 million, with Covid vaccine revenue down about 90% compared to the same period a year ago. Last year, Moderna reported revenue of $1.86 billion.
About $100 million came from the United States and $67 million from international markets, mostly Latin America, Moderna’s chief financial officer Jamey Mock told CNBC in an interview.
The company said the revenue decline is partly due to an expected shift to the seasonal Covid vaccine market, where patients typically receive the vaccine 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, reported for the prior year.
The company maintained its full-year 2024 sales forecast of about $4 billion, which includes revenue from the RSV vaccine. Notably, the company only expects sales to reach $300 million in the first half of the year because respiratory virus season typically falls in the second half of the year.
Moderna said it expects to return to sales growth in 2025 and break even by 2026 as it introduces recent products.
In the first quarter, Mock said the company was “more encouraged by what we’re seeing from a performance standpoint” than by higher sales of the Covid vaccine.
Cost of sales in the fourth quarter was $96 million, down 88% from the same period a year ago. This includes $30 million in write-offs for unused Covid vaccine doses and $27 million in charges related to the company’s efforts to reduce its manufacturing footprint.
First quarter research and development spending decreased 6% to $1.1 billion compared to the same period in 2023. This decline was primarily due to fewer payments to partners in 2024 and lower clinical development and production, including lower clinical trial spending for the company’s vaccines against Covid, RSV and seasonal flu.
Meanwhile, SG&A expenses for the period decreased 10% to $274 million compared to the first quarter of 2023. SG&A expenses typically include the costs of promoting, selling and delivering a company’s products and services.
The company said the reduction is due in part to investment in “digital commercial capabilities” and an increased focus on using artificial intelligence technology to streamline operations.
Last month, Moderna announced a partnership with hefty artificial intelligence OpenAI that aims to automate almost every business process at a biotech company.
Mock told CNBC that Moderna has been working with OpenAI for the past year. He added that 60% to 70% of companies currently utilize AI chatbots for work.
Moderna has so far managed to strengthen investor sentiment about its post-Covid growth path. The company’s shares have rallied more than 10% this year as confidence in its pipeline and messenger RNA platform, the technology used in the Covid shot, grows.
Moderna currently has 45 products in development, several of which are in late-stage testing. These include Moderna’s combination shot targeting Covid and flu, which could win approval as early as 2025.
Moderna is also developing a personalized cancer vaccine with Merck and injections for hidden viruses, among others.
