Outcomes from Moderna (MRNA) Q1 2023
Modern on Thursday topped estimates for first-quarter earnings and revenue and posted a surprise quarterly profit despite lower demand for Covid vaccines, the only marketable product.
The biotech posted revenue of $1.9 billion in the first quarter, driven by Covid-shot earnings pushed back from 2022. That’s more than 60% down from the $6.1 billion it recorded in the same period a year ago on a resurgence in Covid cases.
Moderna posted net income of $79 million, or 19 cents a share, for the quarter. That compares to net income of $3.66 billion, or $8.58 per share, reported in the same quarter last year.
Here’s what Moderna reported versus Wall Street’s expectations, based on a poll of analysts by Refinitiv:
- Earnings per share: 19 cents per share versus an expected loss of $1.77 per share
- Revenue: $1.86 billion versus $1.18 billion expected
Shares of the Massachusetts-based company are up nearly 4% in early trading Thursday. Its shares are down more than 27% by the close on Wednesday, putting the company’s market value at around $50 billion.
Cost of sales for the quarter was $792 million. These included a $148 million write-down for vaccines that have passed their shelf life and $135 million for unused manufacturing capacity.
Moderna maintained its annual guidance of at least $5 billion in revenue from its Covid vaccine, which will come from signed government contracts for the vaccine.
CEO Stéphane Bancel told CNBC’s “Squawk Box” on Thursday that he believes the company is “on track to meet that goal.”
In addition, the company is in talks about new contracts with customers in Europe, Japan and the USA
The US will transition the federal Covid vaccination program to the private market as early as the fall.
Bancel noted that the company is actively discussing new vaccine contracts with US government agencies, pharmacy chains and hospital systems. Moderna expects more clarity regarding those deals over the next four to six weeks.
The company will launch additional boosters after the Food and Drug Administration and Centers for Disease Control and Prevention approved additional vaccines last month targeting the Omicron variant for seniors and those with compromised immune systems.
The FDA is also preparing for a vaccine meeting in June, where outside consultants will choose which Covid strains new vaccines will target when they are rolled out in the fall.
Moderna expects the US to need 100 million vaccine doses annually.
However, demand for Covid shots is still falling as the pandemic eases and the US moves to an annual vaccination schedule rather than repeated booster doses. That leaves Moderna and the rival drugmaker Pfizer are scrambling to steer clear of their Covid stings, which made both companies household names during the height of the pandemic.
“It’s going to be a transition year,” Bancel told CNBC. He added that Moderna is “investing aggressively to grow the business.”
That means strengthening Moderna’s mRNA-based drug pipeline.
The company’s products use messenger RNA technology, which teaches human cells to produce a protein that triggers an immune response against a specific disease.
Stephen Hoge, President of Moderna, highlighted on the company’s conference call its efforts to create vaccines that target more than one respiratory disease in a single dose, which he says will be “the future of our respiratory business.”
The company has five different combination vaccines in early clinical trials, he said.
Bancel told CNBC the company hopes to launch a combination vaccine targeting Covid and the flu by 2025. These vaccinations are adapted to the predominant strains of influenza and Covid that are in circulation.
“So you can just go to your pharmacy and take a shot and get ready for the winter,” he told CNBC.
Moderna said in April it hopes to offer a new line of life-saving vaccines for cancer, heart disease and other conditions by 2030.
This lineup includes Moderna’s experimental vaccine, which targets the respiratory syncytial virus. The company expects to apply for full approval of the adult 60+ shot this quarter.
It also includes Moderna’s personalized cancer vaccine, a much-anticipated mRNA syringe co-developed with him note to target different tumor types. Moderna is also developing a flu vaccine, but the company said the vaccine doesn’t meet the criteria for early success in a late-stage clinical trial.
Clarification: This story has been updated to clarify that Moderna’s revenue fell more than 60% in the first quarter.