$1 billion in cost cuts and 10 new products launched

Moderna The U.S. drugmaker said Thursday it plans to cut about $1.1 billion in expenses by 2027 and win approvals for several new products as it charts a path forward after a rapid decline in its Covid business.

The biotech company said it expects to win 10 new product approvals through 2027. But Moderna said it will also halt work on some products in its pipeline and cancel others, as it aims to “pace itself” in spending on new research and development.

The company aims to cut R&D spending to a range of $3.6 billion to $3.8 billion in 2027, down from $4.8 billion expected at the end of this year, according to a statement.

“You’re going to start seeing things deteriorate because there are some studies that we’re going to stop and not start,” Moderna CEO Stephane Bancel told CNBC, adding that the company is putting its latent product portfolio “on hold.” That refers to a class of viruses that linger in patients for long periods without causing symptoms but can reactivate and cause serious health complications later in life.

However, Moderna shares fell more than 17% on Thursday.

The company's updates “put an end to key elements of the bullish thesis” for its stock and “reflect a deteriorating financial position,” Leerink Partners analyst Mani Foroohar said in an email Thursday.

“The R&D cuts are too far back in time to be credible from a management team that we believe has proven serially incapable of predicting the performance of its business,” Forouhar said.

In a research note released Thursday, Jefferies analyst Michael Yee said the bulk of the cost savings won't come until 2027, “now pushing profitability back to 2028.”

Moderna also announced positive results Thursday from a late-stage clinical trial of its respiratory syncytial virus vaccine in at-risk adults ages 18 to 59, with plans to file for approval in that age group this year. It also announced positive data on its standalone experimental flu vaccine for adults ages 65 and older.

The company unveiled the updates during its annual R&D Day investor event in New York on Thursday, which focuses on its pipeline and long-term business updates. It comes about four months after U.S. regulators approved Moderna’s RSV vaccine for seniors, the second commercially available product after a Covid vaccine.

The company said it now has five respiratory vaccines with positive results in Phase 3 and expects to submit three of those vaccines for approval this year. That includes Moderna’s combination COVID-influenza vaccine, which it expects to submit for approval in the United States this year, along with a new, more effective version of its COVID vaccine.

Moderna also has five non-respiratory products for cancer, latent viruses and rare diseases that could be approved by 2027, according to a company statement.

The company expects revenue in 2025 to be between $2.5 billion and $3.5 billion. Moderna expects to achieve a compound annual growth rate of more than 25% from 2026 to 2028 as new products are launched.

The company's success rate in developing drugs from Phase I to Phase III is “six times higher” than the rest of the biotech and pharmaceutical industry, Bancel said.

“The team has done a really great job, leaving us with a lot of drugs that work, which is why we need to get organized in terms of investing in research and development,” he told CNBC.

Moderna has presented new data on its mRESVIA RSV vaccine, which has been approved in the United States and the European Union for adults aged 60 and older.

The company said the vaccine met all key efficacy goals in an ongoing Phase 3 study in adults ages 18 to 59 who are at higher risk of serious illness from the virus. No safety concerns were noted, Moderna added.

There are currently no RSV vaccines approved worldwide for younger adults at risk, such as those with weakened immune systems or underlying chronic conditions such as asthma and diabetes. Moderna's main competitors in the RSV space, Pfizer and GlaxoSmithKlineThey are also seeking expanded age approval.

Bancel said the company plans to use a “priority review voucher” when it applies for approval for people ages 18 to 59, which would reduce the time it takes the FDA to review a product to six months from 10. Moderna hopes the agency will approve mRESVIA for this age group in time for the RSV season in 2025.

“Millions of people could benefit from this project… We are also doing this just to be able to compete in the market, because if you own a large retail pharmacy, you want your product to be available to all your customers who visit you,” Bancel said.

But the company also halted development of its respiratory syncytial virus vaccine for children under age 2 based on “emerging clinical data.”

Moderna Inc. said its standalone experimental flu vaccine, mRNA-1010, produced a higher immune response against the virus than an existing flu vaccine in a recent Phase 3 trial. The vaccine also showed “consistently acceptable safety and tolerability” across three late-stage trials, the company said.

Meanwhile, Moderna Inc. said it plans to move its vaccine against norovirus, a highly contagious stomach virus that causes vomiting and diarrhea, into phase 3 trials “soon.” Bancel said he believes the company could finish the study within a year and file for approval immediately after that if the data is positive.

“This product could be available within two years of its release, which is great because there is no cure for norovirus today. Many healthcare workers are infected by their patients,” he said.

Moderna is also collaborating with Merck To develop a cancer vaccine, which is being studied in combination with Keytruda in patients with different forms of the disease.

The companies are studying the vaccine in a phase 3 trial in patients with deadly skin cancer, and are discussing approval with regulators based on data from a mid-stage study of the vaccine.

But Moderna said the FDA “did not support” its so-called accelerated approval of the vaccine based on its current data, a designation the FDA gives the drugs more quickly if they meet an unmet medical need for serious conditions.

“We will continue to have discussions” with regulators, Bancel said, “and we are also working on generating more data.”

— CNBC's Angelica Peebles contributed to this report.