Moderna’s Revenue Forecast Takes a Hit Amid Weak Vaccine Demand
The biotech company Moderna (MRNA) has slashed its 2025 revenue forecast by a staggering $1 billion, citing sluggish demand for its newest vaccine and slow sales of its COVID-19 vaccine. This downward revision has sent shockwaves through the market, with Moderna’s stock plummeting over 20% in early trading Monday to $33.05 per share – a far cry from its COVID-era highs of nearly $450 per share in 2021.
A Challenging Landscape for Vaccine Makers
At the annual JPMorgan healthcare conference in San Francisco, CEO Stéphane Bancel revealed the revised forecast, attributing it to the weak demand for respiratory vaccines, including COVID and RSV (respiratory syncytial virus). This slowdown is particularly concerning for vaccine makers, as it affects their core business.
Cost-Cutting Strategies Ahead
To mitigate the impact, Moderna plans to implement further cost-cutting measures, building on its success in reducing cash operating costs by over 25% in 2024 compared to 2023. The company aims to slash 2025 cash costs by $1 billion, with an additional $500 million in cost savings planned for 2026.
RSV Vaccine Launch Faces Headwinds
Moderna’s RSV vaccine, launched last year, faces stiff competition from earlier approved vaccines from Pfizer (PFE) and GSK (GSK). The 2024 winter virus season has seen slower demand for respiratory vaccines, which predominantly affect children and elderly adults.
Industry-Wide Slowdown
Walgreens’ (WBA) earnings results for fiscal year 2024, released last week, also signaled a vaccine demand slowdown that could similarly impact other vaccine makers during the upcoming earnings cycle. The retail pharmacy giant reported less than 1 million COVID vaccines sales in fiscal 2024, a significant drop from 4.7 million in the previous year.
Analysts Sound the Alarm
Leerink Partners analyst Mani Foroohar warns that Moderna’s reduced sales guidance, combined with uncertainty surrounding its COVID/flu combo vaccine and disappointing interim CMV efficacy results, may spell trouble for the company’s growth prospects in 2025. This could lead to future dilutive equity issuance, putting Moderna’s position in the S&P 500 at risk.
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