Modern (MRNA) stock crashed Thursday after slashing sales expectations by at least $2 billion as dwindling Covid shots champ sales.
For this year, Moderna expects sales of $5 billion from its Covid vaccine — the company’s only product. The projection is based on contracts already in place, though Moderna notes there is potential for additional sales from the US, Europe, Japan and “other key markets”.
The forecast far exceeded Wall Street’s expectations. Analysts polled by FactSet expected $7.96 billion in total revenue, including $7.37 billion from the Covid vaccine, Spikevax. Lee Brown, global healthcare sector leader at research firm Third Bridge, said he has seen revenue estimates of nearly $8.1 billion.
To further complicate matters, Moderna expects the majority of sales to come in the second half of 2023. The company expects $2 billion in the first six months of the year. Brown notes that analysts had forecast sales of nearly $3 billion during that period.
Wall Street’s expectations may have to “come down if demand outside the (advanced purchase agreements) declines more than estimated, which appears to be a risk as the consensus will increasingly need to push earnings into the second half,” it said Brown in a note. to customers.
During midday trading in the stock market today, Moderna shares fell 8.3% near 145.
Moderna Share: Earnings Come to Light
The fourth quarter was mixed for Moderna. Revenue beat expectations at $5.08 billion, but fell 29.5%. Analysts expected sales of $5.02 billion. Moderna also earned $3.61 per share, below forecasts at $4.60 per share, according to FactSet. Profits fell 68%.
Both pitfalls were expected with Covid vaccinations and boosters slowing down. To date, more than 69% of the US has been fully vaccinated against the respiratory virus. About 16% of people got one of the updated boosters from Moderna or Pfizer (PFE)/BioNTech (BNTX).
Third Bridge’s Brown noted that the profit drop shouldn’t come as a surprise. Moderna invests heavily in research and development. Selling, general, administrative and research and development expenses increased approximately 87% during the quarter.
That “pressed earnings as the company continues to invest heavily in its clinical development activities, particularly (respiratory syncytial virus), seasonal flu and (cytomegalovirus) programs,” he said. “Moderna also increased its marketing spend to support its commercial activities.”
Moderna’s push into RSV
Moderna stock analysts are keeping a close eye on the company’s next post-Covid efforts. Late Wednesday, the Food and Drug Administration awarded Moderna’s personalized cancer vaccine a groundbreaking title in the treatment of melanoma, in combination with Merck‘s (MRK) Keytruda. The designation enables the agency to speed up the assessment process.
The company is also working on vaccines for respiratory syncytial virus and cytomegalovirus – known by the abbreviations RSV and CMV. Both are common viruses but can be serious in infants and older adults. RSV causes cold symptoms and CMV leads to fever, sore throat, fatigue and swollen glands. Babies born with CMV often experience long-term problems.
Zhyar Said, an analyst at research firm Citeline, says the RSV vaccine will be key. Moderna is preparing to seek FDA approval in the first half of the year. That puts it on track to match Pfizer and GSK (GSK) when the next RSV season kicks off, likely this fall.
“While Moderna has disclosed their presence in the Covid-19 market, it appears they are now moving into the RSV market,” he said in a note. “Moderna takes on GSK’s RSV jab and does well to be one of the leading contenders as data has shown an 83.7% (effectiveness) vaccine.”
That vaccine also has a breakthrough designation.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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