Nikos Pekiaridis | Nurfoto | Getty Images
Modern On Thursday, it posted a narrower-than-expected loss for the first quarter as the company's cost-cutting efforts met with success and sales of its Covid vaccine, its only commercially available product, exceeded expectations.
The results come as Moderna moves closer to bringing another product to market, which it desperately needs as demand for Covid shots falls globally. The biotech company expects U.S. approval for its respiratory syncytial virus vaccine on May 12. If approved, that shot is expected to launch in the third quarter.
Here's what Moderna reported for the first quarter, compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Loss per share: $3.07 vs. loss of $3.58 expected
- Gain: $167 million versus $97.5 million expected
The biotech company posted revenue of $167 million in the first quarter, with Covid-19 shot sales down about 90% from the same period a year ago. Moderna reported revenue of $1.86 billion in the year-ago period.
About $100 million came from the U.S., while $67 million came from international markets, mainly in Latin America, Moderna CFO Jamey Mock told CNBC in an interview.
The company said the decline in sales stemmed in part from an expected transition to a seasonal Covid vaccine market, where patients typically take their shots in the fall and winter.
Moderna posted a first-quarter net loss of $1.18 billion, or $3.07 per share. That compares with net income of $79 million, or 19 cents per share, reported in the same period a year ago.
The company reiterated its full-year 2024 sales guidance of about $4 billion, including revenue from its RSV vaccine. Notably, the company expects only $300 million of this revenue to come in the first half of the year, as respiratory virus season typically occurs in the second half of the year.
Moderna has said it expects to return to sales growth in 2025 and break even with new product launches by 2026.
For the first quarter, Mock said the company is “more encouraged by what we're seeing from a productivity perspective” than higher sales of its Covid vaccine.
Cost of sales totaled $96 million for the fourth quarter, down 88% from the same period a year ago. That includes $30 million in write-offs on unused doses of the Covid vaccine and $27 million in costs related to the company's efforts to reduce its manufacturing footprint, among other costs.
Research and development costs decreased 6% to $1.1 billion in the first quarter 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 costs, 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. SG&A expenses generally include the costs of promoting, selling and delivering a company's products and services.
The company said the reduction is partly due to its investments in “digital commercial capabilities” and increased focus on using AI technologies to streamline operations.
Last month, Moderna announced a partnership with AI heavyweight OpenAI, which aims to automate virtually every business process at the biotech company.
Mock told CNBC that Moderna has been working with OpenAI for the past year. He added that 60% to 70% of the business currently uses an AI chatbot to do work.
Moderna has so far managed to boost investor sentiment about the path forward post-Covid-19. The company's shares are up more than 10% this year on rising confidence around its pipeline and messenger RNA platform, the technology used in its Covid shot.
Moderna currently has 45 products in development, several of which are in advanced testing. This includes Moderna's combination shot against Covid and the flu, which could receive approval as early as 2025.
Moderna is also developing a personalized cancer vaccine and injections against latent viruses together with Merck.