Moderna stock falls 20% as it slashes guidance on low EU sales, tough U.S. vaccine market

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

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

Shares of the company closed more than 20% lower on Thursday.

The company has started shipping doses of its vaccine for respiratory syncytial virus, called mRESVIA, in the U.S. following its approval in May for older adults. It’s Moderna’s second-ever commercially available product after its Covid vaccine, which has seen demand plunge as the world emerges from the pandemic and relies less on protective shots and treatments.

Moderna CEO Stephane Bancel told CNBC there has been “more intensity of competition” for both RSV and Covid vaccines. He noted that mRESVIA is the third RSV shot to enter the market following jabs from Pfizer and GSK, the latter of which dominated the market last year.

He added that “we’ve been having quite intense discussions with governments across Europe” to get Covid vaccine supply from Moderna.

But “some countries, as recently as of last week, have told us that because of a very tight budget … they just don’t have the capacity to buy more vaccine than they need because they already have” another contract, Bancel said.

He is referring to the European Union’s massive renegotiated Covid vaccine supply contract with Pfizer and its German partner BioNTech. He also pointed to the ongoing war in Ukraine, which is straining government budgets. 

Still, Moderna expects to return to sales growth in 2025 and to break even by 2026, with the launch of new products, Bancel said. 

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

• Loss per share: $3.33 vs. loss of $3.39 expected
• Revenue: $241 million vs. $132 million expected

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

The company said the revenue decline came in part from an expected transition to a seasonal Covid vaccine market, where patients typically take their shots in the fall and winter. But Bancel said Moderna had a “good spring season” in the U.S. for seniors, who are recommended to receive an additional dose of the latest round of 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 in part due to its progress in cutting costs. 

Moderna had “a little bit more sales than anticipated but a lot of cost savings ahead of what the Street was expecting,” he said. “So that’s why I’m really happy with the progress we’re making on both fronts.”

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

Research and development expenses for the second quarter rose by 6% to $1.2 billion compared with the same period in 2023. That increase was primarily due to personnel costs, including a higher headcount. 

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

Moderna has so far managed to shore up investor sentiment about its path forward after Covid. Its shares are up nearly 20% this year on increasing confidence around its pipeline and messenger RNA platform, which is the technology used in its Covid vaccine and RSV shot.

The biotech company currently has 45 products in development, five of which are in late-stage trials. They include its combination shot targeting Covid and the flu, which could win approval as early as 2025.

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