The vaccine maker previously revealed plans to slash R&D budget to conserve cash for product launches, but after a rough year of consistent share value decline, analysts remain skeptical.
The post-pandemic economy has not been kind to COVID-19 vaccine maker Moderna. The Cambridge-based biotech has faced a slew of challenges resulting in over a 60% drop in share value year-to-date.
Despite Moderna’s projecting an ambitious $4 billion in cuts to R&D spending by 2028 to prep for product launches, investors are still betting on losses, according to a new analysis by Seeking Alpha. Moderna was the most shorted healthcare stock of the month on the S&P 500 in November, the report found.
As 2024 comes to a close, Moderna has a market cap of $17 billion—a staunch drop from its all-time high of $181 billion in 2021 and $63.8 billion in May. BioSpace takes a look back at the tumultuous year for a hot-button company.
2024’s Slippery Slope
The year appeared to start off strong as CEO Stéphane Bancel posted a letter to stakeholders outlining plans to launch up to 15 new products over the next five years, starting with the commercial launch of its RSV vaccine in 2024 and potential flu/COVID combo in early 2025. Oppenheimer upgraded the stock to “outperform” and Moderna shares saw a jump of 13%.
That boost was short-lived, however, as the stock price continued to slide as interest in the COVID market waned. The trend continued throughout the year, despite positive news from the company.
Moderna secured a profit of $217 million in the fourth quarter of 2023, beating Wall Street expectations. Then in May, the biotech had its second vaccine approved, mRESVIA, a mRNA shot to protect adults over 60 from respiratory syncytial virus (RSV), with sales projected to possibly top $3.4 billion by 2029. Moderna also released pivotal trial data for its flu/COVID combo shot, an investigational individualized neoantigen therapy being tested with Merck’s Keytruda, and scored FDA approval for its updated Spikevax vaccine for COVID-19, while posting Spikevax sales that beat Wall Street estimates in the third quarter with $1.8 billion.
Still, the stock continued to slide.
A Plan to Right the Ship
At September’s event, Moderna revealed that it aims to launch 10 products through 2027 while cutting $1.1 billion from the annual budget. According to the biotech, that will be enough to fund R&D and allow it to break even in 2028, pushed back from a previous promise of 2026.
Investors were less than impressed by the plan, dropping the stock around 12%.
Then last week, the FDA revealed it had detected severe side effects in a trial of Moderna’s RSV vaccine candidates mRNA-1345 and mRNA-1365. Since being approved in older adults, Moderna has been testing the mRNA RSV vaccine in younger populations. An advisory committee reviewing the potential imbalance in severe RSV cases has urged the FDA and companies to continue the research—with caution.
In its R&D day presentation, Moderna said of the mRNA-1345 program in infants under 2 years of age that it did not expect the program to advance past the ongoing Phase I trial “based on emerging clinical data.”
The RSV vaccine market is expected to be a key driver of the overall respiratory vaccines market over the next years, growing by an estimated $4 billion in sales by 2028. Moderna is continuing to develop mRNA-1345 in high-risk adults 18 to 59 years old and in children ages 2 – 17.
Moderna is also contending with President-elect Donald Trump’s nomination of well-known anti-vaccine advocate Robert F. Kennedy Jr. to head the Department of Health and Human Services. Like many vaccine companies, Moderna saw its stock take a nosedive. It fell over 8% alongside Novavax and Pfizer. Moderna and Novavax were down more than 20% over five days following the announcement.
According to Jefferies analysts, the next catalyst for Moderna is upcoming Phase III data for its cytomegalovirus vaccine, anticipated around year-end or early 2025. Depending on the results, the stock could move up or down 10%, the Jefferies group wrote in a note to investors last week.
This could be a critical moment for Moderna. Even as the rhetoric around Kennedy could start to wane, the Jefferies group wrote that “concerns remains regarding cash burn and profitability.” The team thus rated the company as a hold, advising that “investors should remain on the sidelines.”
