Major Cost Savings and Product Launches Ahead: $1 Billion in Cuts, 10 New Products on the Horizon
Moderna announced plans to slash $1.1 billion in expenses by 2027 and introduce new products following a decline in its Covid business. The biotech company aims for 10 new product approvals by 2027 but will pause work on certain products in its pipeline. Moderna intends to reduce research and development spending to $3.6 billion to $3.8 billion by 2027 from an expected $4.8 billion this year. Shares of Moderna dropped over 15% in response to the news.
Leerink Partners analyst Mani Foroohar stated that the company’s updates undermine aspects of its stock’s bullish thesis and highlight a deteriorating financial position. Jefferies analyst Michael Yee noted that most cost savings won’t be realized until 2027, pushing back profitability expectations to 2028. Moderna aims to reach operating cash cost breakeven with $6 billion in revenue in 2028, extending its previous projection to return to growth by 2026.
Moderna revealed positive late-stage trial results for its respiratory syncytial virus vaccine in high-risk adults aged 18 to 59 and an experimental flu shot for seniors. The company also presented updates on its product pipeline, including potential approvals for respiratory and nonrespiratory products by 2027. While it expects revenue of $2.5 billion to $3.5 billion in 2025, Moderna foresees annual growth exceeding 25% from 2026 to 2028 with the launch of new products.
The company plans to expedite approval for its RSV vaccine mRESVIA for adults ages 18 to 59 using a priority review voucher, aiming for clearance before the 2025 RSV season. Moderna is discontinuing development of its RSV vaccine for infants under 2 years old based on emerging clinical data. Its stand-alone flu vaccine, mRNA-1010, demonstrated a stronger immune response in a phase three trial compared to existing options.
Additionally, Moderna is advancing a norovirus vaccine to a phase three trial and collaborating with Merck on a personalized cancer vaccine. The partnership with Merck involves studying the vaccine in combination with Keytruda for various forms of cancer. While the FDA has not supported accelerated approval based on existing data, Moderna remains in discussions with regulators and continues to generate more data.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.