Moderna loses less than expected as Covid vaccine sales beat estimates, cost cuts take hold

Moderna
on
Thursday
posted
a
narrower-than-expected
loss
for
the
first
quarter
as
the
company’s
cost-cutting
efforts
took
hold
and
sales
of
its

Covid
vaccine,
its
only
commercially
available
product,
topped
estimates. 

The
results
come
as
Moderna
inches
closer
to
putting

another
product
on
the
market,
which
it
badly
needs
as

demand
for
Covid
shots
plunges
worldwide.
The
biotech
company
expects
U.S.
approval
for
its
vaccine
against

respiratory
syncytial
virus
on
May
12. If
cleared,
that
shot
is
expected
to
launch
in
the
third
quarter.

Here’s
what
Moderna
reported
for
the
first
quarter
compared
with
what
Wall
Street
was
expecting,
based
on
a
survey
of
analysts
by
LSEG:

• 
  Loss
  per
  share:
  $3.07
  vs.
  loss
  of
  $3.58
  expected
• 
  Revenue:
  $167
  million
  vs.
  $97.5
  million
  expected

“On
the
[operating
expenses]
side
of
a
company,
we’ve
made
great
progress,”
Moderna
CEO
Stéphane
Bancel
said
of
the
cost
cuts
Thursday
on
CNBC’s “Squawk
Box.”
He
added
that
the
biotech
company’s
team “has
done
a
great
job
resizing
the
company.”

Moderna
booked
first-quarter
sales
of
$167
million,
with
revenue
from
its
Covid
shot
dropping
roughly
90%
from
the
same
period
a
year
ago.
The
company
reported
$1.86
billion
in
revenue
in
the
prior-year
period.

Around
$100
million
came
from
the
U.S.,
while
$67
million
came
from
international
markets,
primarily
in
Latin
America,
Moderna
CFO
Jamey
Mock
told
CNBC
in
an
interview. 

The
company
said
the
revenue
decline
came
in
part
from
an
expected
transition
to
a
seasonal
Covid
vaccine
market,
where
patients
typically
take
their
shots
in
the
fall
and
winter.

Moderna
posted
a
net
loss
of
$1.18
billion,
or
$3.07
per
share,
for
the
first
quarter.
That
compares
with
net
income
of
$79
million,
or
19
cents
per
share,
reported
for
the
year-ago
period.

The
company
reiterated
its
full-year
2024
sales
guidance
of
roughly
$4
billion,
which
includes
revenue
from
its
RSV
vaccine.
Notably,
Moderna
expects
only
$300
million
of
those
sales
to
come
in
during
the
first
half
of
the
year
since
the
season
for
respiratory
viruses
is
typically
in
the
latter
half
of
the
year. 

Moderna
has
said
it
expects
to
return
to
sales
growth
in
2025
and
to
break
even
by
2026,
with
the
launch
of
new
products. 

For
the
first
quarter,
Mock
said
the
company
is “more
encouraged
by
what
we’re
seeing
from
a
productivity
perspective”
than
the
higher
sales
of
its
Covid
vaccine. 

Cost
of
sales
was
$96
million
for
the
first
quarter,
down
88%
from
the
same
period
a
year
ago.
That
includes
$30
million
in
write-downs
of
unused
doses
of
the
Covid
vaccine
and
$27
million
in
charges
related
to
the
company’s
efforts
to
scale
back
its
manufacturing
footprint,
among
other
costs. 

Research
and
development
expenses
for
the
first
quarter
decreased
by
6%
to
$1.1
billion
compared
with
the
same
period
in
2023.
That
decline
was
primarily
due
to
fewer
payments
to
partners
in
2024
and
lower
clinical
development
and
manufacturing
expenses,
including
decreased
spending
on
clinical
trials
for
the
company’s
Covid,
RSV
and
seasonal
flu
shots. 

Meanwhile,
selling,
general
and
administrative
expenses
for
the
period
fell
by
10%
to
$274
million
compared
with
the
first
quarter
of
2023.
SG&A
expenses
usually
include
the
costs
of
promoting,
selling
and
delivering
a
company’s
products
and
services.

The
company
said
the
reduction
is
in
part
due
to
its
investments
in “digital
commercial
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
biotechnology
company. 

Mock
told
CNBC
that
Moderna
has
been
working
with
OpenAI
for
the
past
year.
He
added
that
60%
to
70%
of
the
company
currently
uses
an
AI
chatbot
to
do
work. 

Moderna
has
so
far
managed
to
shore
up
investor
sentiment
about
its
path
forward
after
Covid.
Its
shares
are
up
more
than
10%
this
year
on
increasing
confidence
around
its
pipeline
and
messenger
RNA
platform,
which
is
the
technology
used
in
its
Covid
shot. 

The
biotech
company
currently
has
45
products
in
development,
several
of
which
are
in
late-stage
trials.
They
include
its
combination
shot
targeting
Covid
and
the
flu,
which
could
win
approval
as
early
as
2025.

Moderna
is
also
developing
a
stand-alone
flu
shot,
a
personalized
cancer
vaccine
with
Merck
and

shots
for
latent
viruses,
among
other
products.

Correction:
Moderna’s
cost
of
sales
was
$96
million
for
the
first
quarter.
An
earlier
version
misstated
the
time
period.