Moderna stock crashed Thursday after the Covid vaccine maker slashed its research and development budget by $1.1 billion, issued a light 2025 sales outlook and delayed its breakeven point by two years.
The move comes amid a massive commercial push. Over the next three years, Moderna expects to launch 10 new drugs, expanding from the two it currently sells. In 2027, Moderna plans to spend $3.6 billion to $3.8 billion in R&D, down from an anticipated $4.8 billion this year.
"The clinical success of this platform is incredible and there are a lot of exciting products as we try to expand and diversify our future," Chief Financial Officer Jamey Mock told Investor's Business Daily. "At the same time, we also have to deal with commercial realities. ... We are adjusting to our financial discipline by adjusting capital allocations."
On today's stock market, Moderna stock plummeted 12.4% to 69.68. Shares are poised to open at a 10-month low.
Moderna stock has dropped off markedly after shooting to a record high in August 2021. Shares hit a 2024 high in late May. Since then, shares have lost more than half their value, dropping about 59%.
Moderna's Expansion From Two Products
Today, the company sells two products: its Covid vaccine called Spikevax and its RSV vaccine, mResvia. They are expected to generate a respective $2.91 billion and $155 million in sales this year, according to FactSet.
Analysts expect 2024 to see the lightest-ever sales of Spikevax. Sales are projected to accelerate, though, reaching as high as $6.9 billion in 2029 — the latest year for which FactSet has estimates.
Moderna now projects just $2.5 billion to $3.5 billion in sales for 2025, below its estimate for $3 billion to $3.5 billion this year.
The "bull thesis continues to weaken" for Moderna stock, Leerink Partners analyst Mani Foroohar said in a client note. He noted Moderna updated its year-end 2025 cash position to $6 billion — the lower end of the previous range — and pushed its cash flow breakeven to 2028.
"These updates put to rest key elements of the bull thesis and reflect a worsening financial position," he said. "We are unsurprised to see shares down more than 10% as R&D reductions are too far out chronologically to be credible from a management team that we think has proven serially unable to project the performance of their business."
Foroohar rates Moderna stock an underperform.
Upcoming Readouts, Studies
Still, Moderna says it outperforms the industry when it comes to late-stage pipeline success. Once a Moderna drug is in final-phase testing, it has an 83% chance of success. That compares to 69% for the broader biopharma industry, the company says.
Moderna currently has 10 products in — or moving into — late-stage and pivotal testing.
This year, the company is planning to ask for approval of three products, including its next-generation Covid vaccine and a combination Covid/flu vaccine. It also expects to ask the Food and Drug Administration to approve its respiratory syncytial virus vaccine for high-risk adults age 18 to 59.
Later this year, the company expects to have the results of a study in cytomegalovirus. Moderna also says it will begin generating final-phase test data in methylmalonic acidemia before the end of the year. Moderna hopes to vaccinate against cytomegalovirus, or CMV, the leading infectious cause of birth defects in the U.S. Methylmalonic acidemia, also known as MMA, is a rare, genetic liver disease. Moderna is working on a treatment for it.
The company also plans to begin a Phase 3 study of its norovirus vaccine "imminently." It will also start a confirmatory study of its stand-alone flu vaccine.
But Moderna scrapped or deprioritized several programs, including a heart disease medicine developed with AstraZeneca, its RSV vaccine in infants and two cancer drugs.
This story has been updated to correct the year for which Moderna cast its revenue guidance.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
