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    MRNA
    Earnings call· Dec 2024(Q4 FY24)

    Moderna, Inc. MRNA

    Feb 14, 2025 Source

    Executive summary

    Moderna Q4 FY24 — Strong Cash Position and Pipeline Progress Amidst Revenue Decline

    Moderna navigated a challenging 2024 with significant cost reductions and strong cash management, ending the year with $9.5 billion in cash. While revenue declined due to lower COVID-19 vaccine sales and increased competition, the company became multiproduct with mRESVIA's approval and advanced its late-stage pipeline with three respiratory vaccine filings. The focus remains on driving sales of approved products, securing up to 10 new product approvals by 2027, and achieving further cost efficiencies to reach cash breakeven by 2028.

    Highlights

    5

    • Ended FY24 with $9.5 billion in cash and investments, exceeding anticipated $9 billion.

    • Achieved $2.6 billion (27%) reduction in operating expenses in FY24 compared to FY23.

    • Became a multiproduct company with mRESVIA approval and launched in Q3 FY24.

    • Filed for FDA approval for 3 respiratory vaccines (next-gen COVID, RSV 18-59, flu+COVID combo).

    • Reported positive 3-year data for INT adjuvant melanoma Phase II trial.

    Concerns

    5

    • Reported Q4 FY24 net product sales of $0.9 billion, down 66% YoY.

    • Full-year FY24 net product sales were $3.1 billion, at the lower end of revised guidance.

    • Reported a net loss of $1.1 billion in Q4 FY24 and $3.6 billion for full-year FY24.

    • Norovirus vaccine Phase III study placed on FDA clinical hold due to a single case of Guillain-Barré syndrome.

    • CMV vaccine Phase III study did not meet early efficacy criteria, though final analysis is pending.

    Guidance & targets

    13
    CategoryTargetConfidence
    Total revenue
    $1.5 billion to $2.5 billion
    high materiality
    Medium
    First half sales
    approximately $0.2 billion
    medium materiality
    Medium
    GAAP expenses
    $6.4 billion
    high materiality
    High
    Cash costs
    $5.5 billion
    high materiality
    High
    Cash costs
    $5.0 billion
    high materiality
    Medium
    Cost of sales
    approximately $1.2 billion
    medium materiality
    High
    R&D expenses
    approximately $4.1 billion
    high materiality
    High
    SG&A expenses
    approximately $1.1 billion
    medium materiality
    High
    Taxes
    negligible
    low materiality
    High
    Capital expenditures
    approximately $0.4 billion
    medium materiality
    High
    Cash and investments balance
    approximately $6 billion
    high materiality
    High
    Cash breakeven
    no later than 2028
    high materiality
    High
    R&D expense reduction
    $3.7 billion
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    United States
    Benefiting from a $0.2 million favorable adjustment related to a prior period return reserve reversal. Excluding this adjustment, sales volume saw a decline compared to last year, primarily due to lower vaccination rates, lower market share and increased competition.
    		$1.7 billion———
    Outside the U.S.
    Aligning with the midpoint of our guidance. This includes approximately $400 million from advanced purchase agreements that will not recur in 2025.
    		$1.4 billion———

    Operational metrics

    29
    Net product sales
    $0.9 billiondown 66% YoY
    Q4 FY24

    Impacted by earlier launch of updated COVID vaccine in U.S., shifting sales to Q3. International sales lower due to phaseout of advanced purchase agreements.

    Net product sales
    $3.1 billion
    FY24

    At the lower end of revised guidance.

    Cost of sales
    $739 million
    Q4 FY24

    Includes $45 million in third-party royalties, $193 million in inventory write-downs and a noncash charge of $238 million from the termination of a contract manufacturing agreement.

    Cost of sales decline
    $190 milliondecline
    Q4 FY24 YoY

    Compared to prior year, driven by lower product sales volume.

    Cost of sales as % of net product sales
    79%
    Q4 FY24

    Driven by lower product sales volume.

    Cost of sales as % of net product sales (excluding resizing charge)
    53%
    Q4 FY24

    Excluding $238 million resizing charge.

    R&D expenses
    $1.1 billion20% year-over-year decline
    Q4 FY24

    Last year's R&D expenses included $120 million upfront payment related to collaboration with Thematics, which did not recur.

    SG&A expenses
    $351 milliondown 25% year-over-year
    Q4 FY24
    Income tax benefit
    $64 million
    Q4 FY24

    Benefit not material due to global valuation allowance against deferred tax assets.

    Total revenue
    $3.2 billion53% decline from 2023
    FY24

    Primarily driven by lower product sales. Other revenue includes grant, collaboration, licensing, and royalty revenue.

    Cost of sales
    $1.5 billion
    FY24

    Includes $0.2 billion noncash resizing charge.

    Cost of sales (excluding noncash resizing charge)
    $1.3 billionbelow previous guidance of 40% to 45%
    FY24

    Represents a $3.2 billion decrease from 2023 due to lower manufacturing resizing charges, inventory write-downs, and reduced unutilized manufacturing capacity costs.

    R&D expenses
    $4.5 billiondown 6% from 2023
    FY24
    SG&A expenses
    $1.2 billion24% decrease compared to 2023
    FY24
    Income tax benefit
    $46 millioncompared to $772 million expense in 2023
    FY24

    Shift due to global valuation allowance established in 2023.

    GAAP operating expense decline
    $3.9 billion
    FY24 vs FY23

    From $11.1 billion in FY23 to $7.2 billion in FY24.

    Resizing charges
    $1.6 billion
    FY23

    Excluding these charges, operating expenses reduced by $2.6 billion compared to 2023. Includes approximately $300 million of depreciation and amortization.

    Resizing charges
    $0.2 billion
    FY24

    Excluding these charges, operating expenses reduced by $2.6 billion compared to 2023.

    Noncash costs (stock-based comp & D&A)
    $0.9 billion
    FY23
    Noncash costs (stock-based comp & D&A)
    $0.6 billion
    FY24
    Defined cash costs
    $8.9 billion
    FY23

    Excludes manufacturing footprint resizing charges, stock-based compensation and depreciation.

    Defined cash costs
    $6.3 billionyear-over-year decline of $2.6 billion
    FY24

    Excludes manufacturing footprint resizing charges, stock-based compensation and depreciation.

    R&D spend related to respiratory trials
    over 50%
    Current

    Expected to roll off over this year and the following year.

    Inventory write-downs
    $500 million
    FY24
    Unutilized manufacturing capacity
    $100 million
    FY24
    Inventory levels
    under $300 million
    Current

    Refers to raw materials inventory.

    US sales adjustment
    $200 million
    Prior period

    Favorable adjustment to U.S. sales in FY24.

    Advanced purchase agreements (non-recurring)
    $400 million
    FY24

    Will not recur in 2025.

    Capital expenditures (actual)
    $150 million below prior guidance
    FY24

    Some reduction due to prioritization changes, majority due to timing of spend between 2024 and 2025.

    Industry KPIs

    4
    MetricValueDetails
    EPS$2.91 loss (Q4 GAAP), $9.28 loss (FY24 GAAP)USD/share
    Revenue net sales$3.2 billionUSD
    Cash investments balance$9.5 billionUSD
    Geographic regional revenue growthU.S. $1.7 billion, OUS $1.4 billionUSD

    Product announcements

    1
    ProductTypeDetails
    mRESVIAlaunch

    Deals & partnerships

    3
    MerckCollaboration on INT (mRNA-4157) in combination with KEYTRUDA.

    Multiple late-stage studies underway evaluating INT or mRNA-4157 in combination with KEYTRUDA.

    ThematicsCollaboration agreement.

    Last year's R&D expenses included $120 million upfront payment related to our collaboration with Thematics, which did not recur this year.

    VertexCollaboration on Cystic Fibrosis program.

    Vertex is conducting the clinical trial for the CF program.

    Risks & headwinds

    7
    Lower vaccination rates, market share, and increased competition for COVID-19 vaccines.FY24

    U.S. sales volume saw a decline compared to last year.

    Mitigation: Observed signs of stabilization and believe the COVID market will remain durable over time. Entering 2025 with 2 approved products for better competitive positioning.

    Phaseout of advanced purchase agreements (APAs) for international sales.FY25

    $400 million from advanced purchase agreements that will not recur in 2025.

    Mitigation: Upcoming mResvia approvals outside the U.S. should also add to sales in 2025.

    Inventory write-downs and unutilized manufacturing capacity.FY24

    $500 million of inventory write-downs in 2024 and about $100 million of unutilized manufacturing capacity.

    Mitigation: Continued effort to optimize manufacturing footprint, strategic resizing initiative. Inventory levels are now under $300 million. Proactive matching of future demand and required capacity.

    Norovirus vaccine Phase III clinical hold due to Guillain-Barré syndrome (GBS) case.Current

    Single case of Guillain-Barré syndrome.

    Mitigation: Proactively paused activities, updated study documents, submitted for review. Enrollment for Northern Hemisphere completed, no expected impact on timelines for efficacy readout.

    CMV vaccine Phase III did not meet early efficacy criteria.Interim analysis

    Early efficacy criteria was not met.

    Mitigation: DSMB recommended continuing to final analysis. Company remains blinded, final analysis is fully powered and still expected later in 2025.

    Potential requirement for flu efficacy data for COVID-flu combination vaccine approval.Upcoming months

    May be necessary in some cases.

    Mitigation: Stand-alone flu vaccine (mRNA-1010) Phase III efficacy study is ongoing and accruing cases rapidly; first analysis expected at end of current season.

    Licensure timing of new manufacturing sites outside the U.S.2025

    Uncertainties in timing of licensure of our factories and product approvals in Australia, Canada and the U.K.

    Mitigation: Timely licensure would contribute to the upper end of revenue guidance.

    What to watch in Q1 FY25

    5

    Norovirus clinical hold resolution

    Next quarter
    CurrentOn FDA clinical hold
    TargetHold lifted, study proceeds without further delays

    Why it matters

    Resolution of the hold is crucial for the continued development and potential approval of the Norovirus vaccine, a key pipeline asset.

    The trial is currently on FDA clinical hold in the U.S., following a single case of Guillain-Barré syndrome, which remains under investigation.

    Q&A highlights

    5

    How much flexibility is there to further reduce R&D spend beyond 2026, and what are the specifics around the Norovirus GBS case and clinical hold?

    Management believes there's significant flexibility in R&D, with over 50% of trial spend related to respiratory trials expected to roll off. The GBS case is rare but not unexpected in large trials; the hold is for FDA review of updated documents, but Northern Hemisphere enrollment was complete, so timelines are not impacted.

    “So we still think there's a lot of room to be reduced and a lot of flexibility. So as a reminder, we're guiding $4.1 billion for 2025. And in R&D Day, we said we would take it down by $1.1 billion from the $4.8 billion level by 2027. So that suggests a number of about $3.6 billion, $3.7 billion.”

    asked by Ellie Merle · answered by James Mock

    2 min read6 chapters

    Detailed Narrative

    01

    2024 Financial Performance & Cost Efficiency

    Moderna reported $3.2 billion in revenue for FY24, with a net loss of $3.6 billion. The company significantly reduced operating expenses by $2.6 billion (27%) compared to 2023, driven by manufacturing footprint resizing, pricing renegotiations, R&D prioritization, and increased use of digital tools. Cash and investments ended the year at $9.5 billion, exceeding the $9 billion anticipation, primarily due to accounts receivable collections.

    02

    Pipeline Progress & Diversification

    In 2024, Moderna became a multiproduct company with the approval of mRESVIA. The company filed for FDA approval for three respiratory vaccines: next-gen COVID (mRNA-1283), RSV for high-risk adults (18-59), and a flu+COVID combination vaccine. Positive Phase III results were reported for four respiratory vaccine programs, and positive 3-year data for the INT adjuvant melanoma Phase II trial was presented. The company is focused on 10 high-value programs for which it expects financial approvals over the next three years, targeting a total addressable market of over $30 billion.

    03

    Norovirus Clinical Hold

    The Norovirus vaccine Phase III study is on FDA clinical hold following a single case of Guillain-Barré syndrome (GBS). Enrollment for the Northern Hemisphere season was completed prior to the hold, and the company does not expect an impact on timelines for efficacy readout, which is case-driven. The FDA is reviewing submitted documents, and Moderna is being prudent and transparent, prioritizing patient safety.

    04

    CMV Vaccine Update

    The Phase III study for the CMV vaccine did not meet early efficacy criteria at an interim analysis, but the Data and Safety Monitoring Board recommended continuing to final analysis. The company remains blinded and expects final results later in 2025, noting that the interim analysis was not fully powered for high confidence. Case accrual continues steadily, and the final analysis will be fully powered.

    05

    INT Oncology Program

    The Phase III trial for INT (mRNA-4157) in combination with KEYTRUDA for adjuvant melanoma is fully enrolled. Additional Phase III studies are underway in non-small cell lung cancer, and two randomized Phase II trials are ongoing in high-risk muscle-invasive bladder cancer and adjuvant renal cell carcinoma. The timing of📎 readouts for these event-driven trials will depend on event accrual rates.

    06

    Rare Disease Programs

    The registrational study for propionic acidemia (PA) is ongoing, showing a substantial decrease in metabolic decompensation events (MDEs), which is expected to be the pivotal endpoint. For methylmalonic acidemia (MMA), the pivotal study design has been agreed with the FDA, with the study expected to start in 2025. Early safety and clinical data have been positive for both programs.

    AI-generated summary of the company’s earnings call. Not investment advice.