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Moderna The company on Thursday reported a smaller-than-expected loss for the first quarter as the company's cost-cutting efforts held steady and sales of its Covid vaccine, its only commercially available product, beat estimates.
These results come as Moderna is close to launching another product on the market, which it desperately needs as demand for Covid vaccines declines around the world. The biotechnology company expects US approval of its vaccine against respiratory syncytial virus on May 12. If approved, this vaccine is expected to be launched in the third quarter.
Moderna shares closed up more than 12% on Thursday after the results.
Here's what Moderna reported for the first quarter compared to what Wall Street was expecting, based on a survey of analysts conducted by LSEG:
Loss per share: $3.07 vs. expected loss of $3.58 Revenue: $167 million vs. $97.5 million expected
“On the (operating expense) side of the business, we've made significant progress,” Moderna CEO Stephane Bancel said of the cost cuts Thursday on CNBC's “Squawk Box.” He added that the biotech company's team “did a great job of resizing the company.”
Moderna had first-quarter sales of $167 million, with Covid vaccine revenue down nearly 90% from the same period last year. The company reported revenue of $1.86 billion in the same period a year earlier.
About $100 million came from the United States, while $67 million came from international markets, especially in Latin America, Moderna CFO Jimmy Mock told CNBC in an interview.
The company said the revenue decline came in part from an expected move into the seasonal Covid vaccine market, where patients typically get their shots in the fall and winter.
Moderna reported a net loss of $1.18 billion, or $3.07 per share, in the first quarter. That compares to net income of $79 million, or 19 cents per share, reported in the same period last year.
The company reiterated its full-year 2024 sales guidance of about $4 billion, which includes RSV vaccine revenue. Notably, Moderna expects only $300 million of these sales to come during the first half of the year given that respiratory virus season typically falls in the latter half of the year.
The second quarter will include part of the company's recently announced contract with Brazil to supply 12.5 million Covid vaccines, executives said during Wednesday's earnings call.
Moderna said it expects to return to sales growth in 2025 and break even by 2026, with the launch of new products.
For the first quarter, Mock said the company was “further encouraged by what we're seeing from a production perspective” of higher sales of its Covid vaccine.
Cost of sales was $96 million for the first quarter, down 88% from the same period last year. That includes a $30 million write-off of unused doses of the Covid vaccine and $27 million in charges related to the company's efforts to shrink its manufacturing footprint, among other costs.
R&D expenses for the first quarter decreased 6% to $1.1 billion compared to the same period in 2023. This decrease was primarily due to lower payments to partners in 2024 and lower clinical development and manufacturing expenses, including lower spending on clinical trials for vaccines. The company's Covid, RSV and seasonal influenza vaccines.
Meanwhile, selling, general and administrative expenses for the period decreased 10% to $274 million compared to the first quarter of 2023. SG&A expenses typically include costs to promote, sell and deliver the company's products and services.
The company said the reduction was due in part to its investments in “digital business capabilities” and an increased focus on using artificial intelligence technologies to streamline operations.
Last month, Moderna announced a partnership with AI heavyweight OpenAI that aims to automate nearly every business process at the biotech company.
Moderna has been working with OpenAI for the past year, Mok told CNBC. He added that 60% to 70% of the company currently uses AI-powered chatbots to do work.
So far, Moderna has been able to boost investor sentiment about its path forward post-Covid. Its shares have risen more than 10% this year thanks to increased confidence around its pipeline and messenger RNA platform, the technology used in the Covid vaccine.
The biotech company currently has 45 products in development, many of which are in late-stage trials. They include combination shots targeting Covid and influenza, which could receive approval as early as 2025.
Moderna is also developing a standalone influenza vaccine, a personalized cancer vaccine in collaboration with Merck, and vaccines for latent viruses, among other products.
Correction: Moderna's cost of sales was $96 million in the first quarter. An earlier version misstated the time period.
