Moderna (MRNA) Q2 2024 earnings

Modern on Thursday reported second-quarter revenue that beat expectations but cut full-year sales guidance, citing lower sales in Europe, a “competitive environment” for respiratory vaccines in the U.S. and the potential to delay international revenue into 2025.

The biotech company now expects 2024 product revenue to be between $3 billion and $3.5 billion, down from its previous guidance of $4 billion.

The company’s shares closed more than 20% lower on Thursday.

The company has begun shipping doses of the vaccine for respiratory syncytial virus, called mRESVIA, in the US after it was approved in May for the elderly. It is the second commercial product available at Moderna after the Covid vaccine, which has led to a surge in demand as the world emerges from the pandemic and relies less on shots and protective treatments.

Moderna CEO Stephane Bancel told CNBC that there is “greater intensity of competition” for RSV and Covid vaccines. He noted that mRESVIA is the third RSV shot to enter the market after jabs from Pfizer and GSKthe latter dominated the market last year.

He added that “we have had quite intense discussions with governments across Europe” to request supplies of the Covid vaccine from Moderna.

But “some countries, as recently as last week, have told us that because their budgets are so low … they just don’t have the capacity to buy more vaccines than they need because they already have” other contracts, Bancel said.

He pointed to the renegotiated Covid vaccine supply contract with the European Union Pfizer and German counterparts BioNTech. He also pointed to the ongoing war in Ukraine, which has affected the government’s budget.

Still, Moderna expects to grow again in 2025 and to stop in 2026, with the launch of new products, Bancel said.

Here’s what Moderna reported for the second quarter compared to Wall Street’s expectations, based on a survey of analysts by LSEG:

• Loss per share: $3.33 vs the loss of $3.39 expected
• result: $241 million vs $132 million expected

The company posted a second quarter profit of $241 million, with product sales from the Covid shot down 37% from the same period a year ago. Moderna reported revenue of $344 million in the year-ago period.

The company said the drop in revenue was part of an expected transition to a seasonal Covid vaccine market, where patients typically get shots in the fall and winter. But Bancel said Moderna had a “good spring” in the US for the elderly, who were advised to receive additional doses of the latest Covid shots.

Moderna posted a net loss of $1.28 billion, or $3.33 per share, for the second quarter. That compares with a net loss of $1.38 billion, or $3.62 per share, reported for the year-ago period.

Bancel said the company lost less than Wall Street expected because of its progress in cutting costs.

Moderna had “more sales than anticipated, but a lot of cost savings ahead of what the Street expected,” he said. “That’s why I’m so happy with the progress we’re making on both sides.”

Cost of sales was $115 million, down 84% from the same period a year ago. This includes $14 million to write off unused doses of the Covid vaccine and $55 million in costs related to the company’s efforts to reduce its manufacturing footprint, among other costs.

Research and development expenses for the second quarter increased 6% to $1.2 billion compared to the same period in 2023. The increase was mainly due to personnel costs, including a higher number of employees.

Meanwhile, selling, general and administrative expenses for the period fell 19% to $268 million compared to the second quarter of 2023. SG&A expenses typically include the cost of promoting, selling and delivering the company’s products and services.

Moderna has now managed to raise investor sentiment on how to move forward after Covid. The stock is up nearly 20% this year on increasing confidence in its pipeline and messenger RNA platform, which is the technology used in the Covid vaccine and RSV shot.

The biotech company currently has 45 products under development, five of which are in late-stage trials. They include a combination shot targeting Covid and flu, which could be approved as early as 2025.

Moderna is also developing a stand-alone flu shot, a personalized cancer vaccine Merck and shots for latent viruses, among other products.