Nikos Pekiaridis | Nurfoto | fake images
modern It posted a surprise quarterly profit on Thursday, driven in part by deferred revenue, even as the company saw a drop in sales of its Covid vaccine, its only marketable product.
The results cap a difficult year for the biotech company and other Covid vaccine makers, which saw revenue fall as the world continued to emerge from the pandemic and relied less on protective shots and treatments.
Here's what Moderna reported for the fourth quarter compared to what Wall Street expected, according to a survey of analysts by LSEG, formerly known as Refinitiv:
- Earnings per share: 55 cents. That may not be comparable to a 97-cent loss expected by analysts.
- Revenue: $2.81 billion vs. $2.5 billion
Moderna posted net income of $217 million, or 55 cents per share, in the fourth quarter. That compares with net income of $1.47 billion, or $3.61 per share, reported during the same period a year earlier.
The biotech company posted fourth-quarter sales of $2.81 billion, and sales of its Covid vaccine fell 43% from the same period a year earlier. That decline was primarily due to lower vaccine volumes, but was partially offset by a higher average sales price of the vaccine, according to Moderna.
Notably, the company said it recorded $600 million in deferred revenue during the quarter related to the company's work with Gavi, a global non-governmental vaccine organization that coordinated a global vaccine distribution program.
But Moderna CFO Jamey Mock told CNBC in an interview that deferred revenue is “kind of a non-starter” and isn't “really the best way to beat earnings.”
He noted that Moderna is most excited about its lower-than-expected cost of sales, which he called one of the main reasons the company's earnings beat some analysts' expectations.
Cost of sales amounted to $929 million for the fourth quarter and $4.69 billion for the full year. That includes charges related to the company's efforts to reduce manufacturing of its Covid vaccine and writedowns of unused doses of the vaccine.
In November, Moderna said it expected sales costs to reach $5 billion for the year.
“We started to see some productivity fruits in the fourth quarter, and that's what we're happy about,” Mock said, adding that Gavi's deferred revenue is “just pure accounting.”
Still, deferred revenue boosted Moderna's full-year Covid vaccine sales to $6.7 billion, an amount the company first disclosed in January. It posted $18 billion in revenue in 2022 and expects sales of the shot to fall further in 2024.
Moderna reiterated its full-year 2024 sales forecast of approximately $4 billion. That forecast includes revenue from its respiratory syncytial virus, or RSV, vaccine, which could win approval from the U.S. Food and Drug Administration in April.
The company will continue to reduce expenses in 2024, Mock said, including a projected $4.5 billion in research and development expenses for the full year, down from $4.8 billion in 2023.
“We are also going to increase our discipline,” he said.
Moderna has said it expects to return to sales growth in 2025 and break even in 2026, with the launch of new products. The company lost $4.7 billion for the entire year 2023, compared to a profit of $8.4.
billion the previous year.
Currently, Moderna has 45 products in development, nine of which are in the final stage of testing. They include Moderna's combination vaccine targeting Covid and flu, which could gain approval as early as 2025.
The project also includes Moderna's personalized cancer vaccine, a highly anticipated injection that is being developed with merck to attack different types of tumors in combination with the successful Keytruda immunotherapy.
Moderna will host an earnings conference call with investors at 8:00 a.m. ET.
