Moderna
MRNA,
reported a surprise first-quarter profit on Thursday, emphasizing the ongoing market potential for COVID-19 vaccine sales even as it races to diversify into other products targeting other respiratory viruses, bacterial pathogens, cancer and other conditions.
The biotech company reported first-quarter revenues of $1.862 billion, down 69% from a year earlier, amid dwindling sales of its COVID-19 vaccine. But Moderna reiterated that it expects a minimum of $5 billion in 2023 COVID vaccine sales from previously announced advance purchase agreements and said it’s in active negotiations for additional sales in the U.S., European Union and other key markets. On a call with analysts Thursday morning, Moderna confirmed that the U.S. list price for its commercial COVID-19 vaccine will be in the range of $110 to $130.
Moderna’s first-quarter net income of $79 million, or 19 cents a share, was down from $3.657 billion, or $8.58 a share, in the year-earlier period but blew past Wall Street expectations. The FactSet consensus was for a loss per share of $1.75.
COVID-19 vaccine sales totaled $1.8 billion in the first quarter, Moderna said, and sales of updated shots matched to the current strains will start in the second half of this year. “There continues to be a clear need to protect against severe COVID infections, and our customers recognize that need,” Moderna chief commercial officer Arpa Garay said on the conference call Thursday, noting that in the current season the number of COVID hospitalizations has been nearly triple the number of flu hospitalizations and more than triple the number of hospitalizations for respiratory syncytial virus (RSV).
See also: Moderna is developing a vaccine against the tick-borne Lyme disease, in a first for the company
As it looks to rapidly develop the commercial market for COVID vaccines, Moderna is contracting with national and regional pharmacies, group purchasing organizations and government health providers including the U.S. Department of Veterans Affairs and the Department of Defense, Garay said.
Globally, “I believe that we’ll see significant additional contracts in the U.S., in Japan and around the world for fall of 2023,” Moderna CEO Stephane Bancel said on the call Thursday. “COVID is not going away.”
Looking beyond COVID, Moderna hopes to launch its RSV vaccine for older adults next year, the company said. GSK yesterday won the race for the first FDA approval of an RSV vaccine and said it planned to launch the shot in the U.S. later this year.
For respiratory vaccines, Moderna sees a total potential addressable market of $6 billion to $8 billion for RSV, $6 billion to $9 billion for flu, and $15 billion for COVID vaccines. “We believe we can take a sizable share of this roughly $30 billion respiratory market,” Garay said.
Combination vaccines, such as a Covid and flu shot that Moderna is developing, “will be the future of our respiratory franchise,” Moderna President Stephen Hoge said on the call Thursday, adding that the company now has five different combination vaccine candidates in early clinical trials.
A closely watched individualized cancer vaccine that Moderna is developing with Merck will enter phase 3 trials in melanoma this year, the company said. Among melanoma patients in a clinical trial, a Moderna mRNA therapy in combination with Merck’s Keytruda cut the risk of recurrence or death by 44% compared with Keytruda alone, the companies announced last month. The FDA in February granted the investigational vaccine a breakthrough therapy designation, which helps expedite development and review of drugs designed to treat a serious condition.
Research and development costs are climbing quickly, with Moderna projecting full-year R&D investments of about $4.5 billion, up from $3.3 billion last year. The majority of that cost stems from respiratory vaccines, “which we expect to generate significant returns in the relatively near term,” Moderna chief financial officer Jamey Mock said on the call Thursday. By 2027, the company expects respiratory vaccines to generate about $4 billion to $9 billion in free cash flow annually with further room for growth, Mock said.
Moderna stock is down 24.4% in the year to date, while the S&P 500
SPX,
has gained 5.6%
