Moderna shares drop 6.5% due to COVID-19 vaccine sales and production setback

Moderna, Inc (MRNA) witnessed a 6.5% decline in its shares on Thursday, largely in response to disappointing sales figures and a reduction in production of its COVID-19 vaccine, Spikevax, as a result of declining demand. This development led to Moderna reporting a substantial Q3 2023 after-tax loss of $3.6 billion. The company’s revenue also experienced a significant 46% year-on-year drop to $1.83 billion, with the decrease primarily attributed to reduced vaccine sales.

The company acknowledged that much of this decline was the consequence of scaling back the production of COVID-19 vaccines and the establishment of a tax evaluation allowance. Following the release of this quarterly report, Moderna shares plummeted to a three-year low.

Moderna’s CEO, Stéphane Bancel, in an interview with CNBC, shed light on the company’s strategic shift. He explained that Moderna has taken substantial steps to resize its manufacturing infrastructure, a move aimed at ensuring the long-term profitability of its COVID-19 franchise beyond 2024. Bancel stated, “During the pandemic, we were obsessed about scaling up manufacturing to make as many doses as we could to help as many people as we could. And now that we’re moving into an endemic setting, it is important to resize the company.”

Some key points to note about Moderna:

Moderna is a renowned pharmaceutical and biotechnology company, most notably recognized for its vaccines, including the mRNA COVID-19 vaccine. Spikevax, their COVID-19 vaccine, is authorized by the World Health Organization (WHO) in 88 countries and approved for 70 trials in 24 countries.

In Nigeria, Spikevax was one of the seven approved COVID-19 vaccines for use.

In October, Moderna faced significant challenges within the S&P 500, as it cautioned about uncertainties related to the demand for COVID-19 vaccines for the current year. This warning came shortly after Pfizer revised its guidance, citing the impact of COVID-19 products.

While the company anticipates achieving approximately $4 billion in revenue by 2024, the sales projections for 2024 have fallen short of analysts’ expectations. Moderna expects a substantial portion of this revenue to materialize in the second half of the year, driven by sales of its COVID-19 shot and its Respiratory Syncytial Virus (RSV) vaccine. The RSV vaccine is slated for launch in 2024 and has shown an impressive 82.4% effectiveness in preventing RSV lower respiratory tract diseases in adults.

This strategic shift, though challenging in the short term, is geared towards ensuring Moderna’s sustained success and profitability beyond the initial rush of COVID-19 vaccine demand. As the company continues to adapt to the evolving landscape of the pandemic, investors and stakeholders will be closely monitoring its performance and future prospects.