Moderna (MRNA) reported a bigger-than-expected quarterly loss on Friday, mainly due to a charge linked to efforts to reduce its manufacturing capacity in response to weakening demand for its COVID-19 vaccine. As a result, the company’s shares were down by about 4% in pre-market trading.
The company posted a quarterly loss of $2.91 per share, which exceeded analysts’ expectations of a $2.68 per share loss, according to data compiled by LSEG. In comparison, Moderna had earned 55 cents per share during the same period last year.
Moderna’s finance chief, James Mock, attributed the loss to a $238 million non-cash charge related to the termination of its agreement with a contract manufacturer. This decision was part of a broader effort to scale down vaccine production and reduce excess manufacturing capacity, aiming to eliminate potential waste. However, the company did not disclose the name of the affected manufacturer.
In late 2023, Moderna had announced it would scale down production of its COVID-19 vaccine, Spikevax, including reducing manufacturing at Lonza’s Swiss facility. This move is part of a larger cost-cutting initiative, which helped lower the cost of sales by 47% to $1.5 billion last year. Moderna plans to further reduce costs this year, targeting a cut of $1 billion in cash costs and an additional $500 million by 2026. Additionally, the company slashed its 2025 sales forecast by $1 billion earlier in the year.
Sales of Moderna’s COVID-19 vaccine have significantly decreased from their peak during the pandemic, contributing to a nearly 60% drop in the company’s stock price last year. The uptake of its respiratory syncytial virus (RSV) vaccine also fell short of expectations.
For the quarter, Moderna’s total revenue fell nearly 66% to $966 million, although it exceeded analysts’ expectations of $942.84 million. Sales included $923 million from its COVID-19 vaccine and $15 million from its RSV vaccine. The decline was primarily attributed to the earlier launch of Moderna’s updated COVID-19 vaccine in the U.S., which shifted some sales to the third quarter, as well as lower international sales.
Despite the challenges, Moderna’s cash reserves remain strong, with $9.5 billion in cash, cash equivalents, and investments at the end of 2024.
The company also stated it expects approval later this year for the use of its RSV vaccine in high-risk adults aged 18 to 59 years.
