The vaccine maker is competing with well-established rivals in markets that have a mix of demand issues as well as commercial and structural headwinds, as the biotech looks to establish new growth drivers.
U.S. respiratory vaccine manufacturers face challenges on multiple fronts heading into the 2024–2025 season. COVID-19 vaccine sales are falling, companies are expecting soft demand for flu vaccines and the potentially fast-growing respiratory syncytial virus space is contending with recommendations that are tipped to constrain growth. Against that backdrop, Moderna is trying to establish itself in these markets.
Moderna’s Spikevax vaccine was a cornerstone of the public health response to COVID-19 but sales dropped as the crisis eased, forcing the biotech to work to establish new growth drivers. The company has approval for an RSV vaccine and the FDA last week signed off on its updated mRNA COVID-19 vaccine—as well as Pfizer-BioNTech’s Comirnaty—to protect against currently circulating variants in the U.S. Moderna also has positive Phase III data on a flu-COVID combination vaccine, while Pfizer/BioNTech was hit with a late-stage setback earlier this month that could allow the biotech to widen its lead, with a combo vaccine eliciting superior immune responses against the coronavirus and three influenza strains.
Moderna is “the clear lead for potential approval of a combo flu/COVID mRNA vaccine,” William Blair analyst Myles Minter wrote in an investor note earlier this month, adding that this “will be an important factor in determining the quality of the 2026 breakeven guidance that has recently come under increased investor scrutiny given materially lowered 2024 product revenue guidance.”
As part of its second-quarter earnings report earlier this month, Moderna lowered its 2024 revenue guidance from an estimated $4 billion to a range of between $3 billion and $3.5 billion due to weak demand for its COVID vaccine.
Jefferies analyst Michael Yee in a note to investors said the guidance “was worse than expected” and raised the issue of management’s credibility. “The key disappointment is for the second year in a row, we see a big guidance cut despite consistent high management confidence at each year and investor frustration with guidance credibility combined w/consistent bullishness e.g. on COVID and other vaccine areas which once again did not play out,” Yee wrote.
In flu, Moderna will be entering a no-growth market dominated by well-established incumbents. Sanofi is forecasting a low single-digit decline in flu vaccine sales this year because it expects “softer vaccination rates,” CFO François-Xavier Roger said on a Q2 earnings call in July.
The number of flu vaccine doses distributed in the U.S. peaked at 194.4 million in the pandemic-era 2020 to 2021 respiratory disease season. By the 2023–2024 season, the figure had slipped to 157.7 million. The number of doses is down on the pre-pandemic period, despite more people in 2023 than 2019 saying vaccines are the best way to prevent flu-related hospitalizations and deaths. Last year’s survey found 31% of people do not trust vaccines.
Raising the COVID Vaccination Rate
While the flu vaccine market has contracted, uptake of the shots still far exceeds the current penetration of COVID-19 products. Minter told BioSpace the U.S. COVID-19 vaccination rate was 11% last year, compared to around 44% for flu vaccines. The gap between the vaccination rates creates a potential opportunity for Moderna.
“Could you bridge the gap between the dwindling COVID-19 vaccine vaccination rate and the relatively stable flu vaccination rate? That’s what [Moderna is] going to try to address with a potential combination product,” Minter said. “You might not build the flu market. But you may be able to bridge the gap and lift that COVID-19 vaccination rate number with a combination product.”
Moderna will not have a combination product to leverage to increase the COVID-19 vaccination rate in the upcoming respiratory disease season, however. Lacking that product, the biotech’s efforts to raise the rate are focused on activities such as a “Back to Basics” awareness campaign. Stéphane Bancel, CEO of Moderna, said on a Q2 earnings call earlier this month that the goal is to communicate the importance of getting a COVID-19 vaccine each year and to educate people about the dangers of long COVID and how vaccines can help reduce the risk.
The company has begun the awareness campaign before the start of the COVID-19 season, running ads on Facebook and Instagram with messages such as “the risk of long COVID goes up with every infection.” The ads show activities that people are unable to do if they get COVID-19 or long COVID, such as playing fetch with their dog or going for dinner with their wife. Minter expects the ads to have a limited impact.
“Long COVID is not something that has just popped up,” Minter said. “Could putting out a campaign about long COVID build a vaccination rate plus or minus a few percentage points? Absolutely. But is that really going to matter for Moderna? Probably not. They’re looking to substantially close the gap between the flu and COVID-19 vaccination rates.”
Winning RSV Market Share
Bancel said the biotech is seeing similar competitive pressures in COVID-19 and RSV. Moderna competes with Pfizer for the COVID-19 market and Pfizer and GSK for the RSV opportunity. The biotech is facing challenges as its large rivals have bundled products and been “much more aggressive” on activities such as supply chain, pricing and marketing spending, according to Bancel.
Jefferies analyst Peter Welford in a note to investors last week reported that U.S. prescription volumes for GSK’s RSV vaccine Arexvy increased more than 22% week over week, in-line with expectations. “GSK market share falls 120bps to hold a 69% market share, with Pfizer’s Abrysvo growing slightly faster at +29% w/w, whilst Moderna’s mRESVIA remains negligible,” Welford wrote.
Moderna’s mRESVIA, approved by the FDA in late May, is the company’s second-ever product and the third RSV vaccine to enter the market behind shots developed by GSK and Pfizer. The problem for all three companies is that they are all looking at potential vaccine sales slumps thanks to recently updated CDC guidelines regarding the use of shots in seniors, which Minter contends gives “no clear favor to either mRESVIA or protein-based RSV vaccine.”
In RSV, Moderna’s attempt to overcome the challenges center on features that set its mRESVIA vaccine apart from rival products, notably the fact it is the only product available as a prefilled syringe and trials are yet to see cases of Guillain-Barré syndrome, a side effect the CDC warns about for RSV vaccines in general.
Bancel said Moderna continues to believe its delivery format will “resonate well with customers, offering them the ability to use their time much more efficiently during the busy fall vaccination season and to reduce potential medical errors.” However, Moderna CFO James Mock admitted “this year is not turning out as we expected.” The biotech’s product arrived too late to influence the 2024–2025 RSV season.
“By the time Moderna came to the market with their recommendation for use in RSV, those contracts for CVS and Walgreens and the major retail pharmacies in the U.S. were already locked up and they went to GSK and Pfizer,” Minter said.
Yee emphasized the fact that Moderna “walked back confidence” for RSV and is “now anticipating a slower ramp due to competition and fewer contracts.” Management is clear they expect “modest” revenues this year, he said.
The situation makes 2025 the year that Moderna hopes will start on a more level playing field with GSK and Pfizer. After that, the fight for market share will depend on factors such as safety and durability, plus how those data influence CDC recommendations. Convenience could matter, too. While Moderna may have an edge in some of those areas, the biotech will also need to compete with well-oiled commercial machines.
“It’s all going to come down to contracting ability,” Minter said. “And obviously GSK and Pfizer are no small companies to overcome in terms of vaccine contracting and potential bundling.”
