Nikos Pekiaridis | Nurfoto | fake images
modern It posted a smaller-than-expected loss for the first quarter on Thursday as the company's cost-cutting efforts took hold and sales of its Covid vaccine, its only commercially available product, beat estimates.
The results come as Moderna moves closer to bringing another product to market, which it desperately needs as demand for Covid shots plummets around the world. The biotech company expects the United States to approve its respiratory syncytial virus vaccine on May 12. If approved, that vaccine is expected to be released in the third quarter.
Moderna shares closed more than 12% higher on Thursday following the results.
Here's what Moderna reported for the first quarter compared to what Wall Street expected, according to a survey of analysts by LSEG:
- Loss per share: $3.07 vs. expected loss of $3.58
- Revenue: $167 million vs. $97.5 million expected
“About him [operating expenses] On a company side, we have 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 made a great job in resizing the company.
Moderna reported first-quarter sales of $167 million, and revenue from its Covid vaccine fell about 90% from the same period a year earlier. The company reported $1.86 billion in revenue in the prior-year period.
About $100 million came from the United States, 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 was partly due to an expected transition to a seasonal Covid vaccine market, where patients typically receive their vaccines in the fall and winter.
Moderna posted a net loss of $1.18 billion, or $3.07 per share, during the first quarter. That compares with net income of $79 million, or 19 cents per share, reported for the same period a year earlier.
The company reiterated its full-year 2024 sales guidance of approximately $4 billion, which includes revenue from its RSV vaccine. Notably, Moderna expects only $300 million of those sales to come during the first half of the year, as respiratory virus season typically occurs in the second half of the year.
The second quarter will include a portion of the company's recently announced contract with Brazil to supply 12.5 million Covid vaccines, executives said during an earnings call Wednesday.
Moderna has said it expects to return to sales growth in 2025 and break even in 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 by increased sales of its Covid vaccine.
Cost of sales was $96 million during the first quarter, down 88% from the same period last year. That includes $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, among other costs.
Research and development expenses for the first quarter decreased 6% to $1.1 billion compared to the same period in 2023. That decrease was primarily due to fewer payments to partners in 2024 and lower clinical development and manufacturing expenses, including lower spending on clinical trials 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 to the first quarter of 2023. Selling, general and administrative expenses typically include promotional, selling and delivery costs of a company's products and services.
The company said the reduction is due in part to its investments in “digital business capabilities” and an increased focus on using artificial intelligence technologies to optimize operations.
Last month, Moderna announced a partnership with AI heavyweight OpenAI, which aims to automate nearly all of the biotech company's business processes.
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 for work.
So far, Moderna has managed to bolster investor confidence about its path forward post-Covid. Its shares have risen more than 10% this year due to growing confidence in its messenger RNA pipeline and platform, which is the technology used in its Covid vaccine.
The biotech company currently has 45 products in development, several of which are in the late stages of testing. They include its combined Covid and flu vaccine, which could gain approval as early as 2025.
Moderna is also developing a standalone flu vaccine, 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.
