modern It posted a surprise profit for the third quarter on Thursday, beating Wall Street estimates, as its cost-cutting efforts took hold and sales of its Covid vaccine were stronger than expected.
The biotechnology company posted net income of $13 million, or 3 cents per share, in the third quarter. That compares with a net loss of $3.63 billion, or 9.53 cents per share, reported during the same period a year earlier.
Moderna is cutting expenses, with a recently announced goal of achieving $1.1 billion in savings by 2027, as it tries to recover from the rapid decline of its Covid business. It is the first quarter to include sales of Moderna's respiratory syncytial virus (RSV) vaccine, its second commercially available product.
Before the end of the year, the company plans to apply for approval of its experimental “next generation” Covid vaccine and its combination shot targeting Covid and flu. This year, Moderna also expects to apply for expanded approval of its RSV vaccine, aimed at high-risk adults ages 18 to 59.
Moderna said Thursday that its newest Covid vaccine turned a profit after winning approval in the U.S. three weeks ahead of the latest version of the vaccine in 2023, allowing the biotech company to “meet demand more more effective.” The company was able to ship doses to pharmacies and healthcare providers and get them into the arms of more patients sooner.
“I think the earlier launch and a steeper ramp drove a much higher number of sales” for the Covid vaccine, Moderna CEO Stéphane Bancel said in an interview. During the first week of the vaccine rollout, the company shipped twice as much product globally as in 2023, Bancel said.
He added that “this was a quarter of great cost reduction and we will continue to do so.”
Here's what Moderna reported for the third quarter compared to what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: 3 cents versus an expected loss of $1.90
- Revenue: $1.86 billion vs. $1.25 billion expected
Moderna posted third-quarter sales of $1.86 billion, only slightly higher than the $1.83 billion in revenue it posted during the same period a year ago. The vast majority of that total came from its Covid shot, including $1.2 billion in U.S. sales and about $600 million from international markets.
The company's third-quarter revenue also included $10 million in U.S. sales of its RSV vaccine, which gained approval in May. Moderna said sales of that vaccine were lower than expected since it was approved and recommended by regulators later in the contracting season, when many vaccine distributors had already filled their orders.
Analysts were expecting sales of $132 million for the RSV vaccine, according to estimates compiled by StreetAccount. Moderna's RSV vaccine is so far approved in the US, European Union, Norway, Iceland and Qatar.
The company reiterated its full-year 2024 product sales guidance of approximately $3 billion to $3.5 billion. Last quarter, Moderna cut its outlook due to lower expected sales in Europe, a “competitive environment” for respiratory vaccines in the US and the potential for deferred international revenue until 2025.
Moderna shares have fallen nearly 50% this year as investors reflect on their path forward post-Covid. The company is betting on a project built around its messenger RNA platform, which is the technology used in its Covid vaccine and its RSV vaccine.
The biotechnology company currently has 45 products in development and hopes to bring 10 of them to market in the next three years.
Moderna is developing a standalone flu vaccine, a personalized cancer vaccine with Merck, and shots for latent viruses, among other products.
Cost of sales for the third quarter was $514 million, down 77% from the same period last year. That includes $214 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 decreased 2% to $1.1 billion compared to the same period in 2023. Moderna said that decrease was primarily due to lower clinical development and manufacturing expenses, citing decreased spending on clinical trials, among other factors.
Meanwhile, selling, general and administrative expenses for the period fell 36% to $281 million compared to the third quarter of 2023. Selling, general and administrative expenses generally include promotional, selling and delivery costs of a company's products and services.
