Biotechnology specialist Moderna (MRNA 0.51%) reported third-quarter earnings on Thursday, Nov. 7, that exceeded analyst estimates largely thanks to earlier-than-expected approval of its updated COVID-19 vaccine. Revenue rose by 2% to $1.86 billion, outperforming consensus revenue estimates of $1.3 billion. EPS for the quarter came in at $0.03, substantially ahead of the anticipated loss of $1.94 per share.
Overall, the quarter reflected stronger-than-expected financial performance that was aided by early approvals but also due to well-managed costs and strategic pivots. Still, concerns remain about competitive and market pressures affecting its newer vaccines.
| Metric | Q3 2024 | Analyst Estimate | Q3 2023 | Change (YOY) |
|---|---|---|---|---|
| EPS | $0.03 | ($1.94) | ($9.53) | N/A |
| Revenue | $1.86 billion | $1.3 billion | $1.83 billion | 1.9% |
| Cost of sales | $514 million | N/A | $2.24 billion | (77%) |
| R&D expenses | $1.14 billion | N/A | $1.16 billion | (2%) |
Source: Moderna. Note: Analyst consensus estimates for the quarter provided by FactSet. YOY = Year over year.
Overview of Moderna's Business and Current Focus
Moderna is a biotechnology company specializing in mRNA therapeutics and vaccines. It gained tremendous recognition for its COVID-19 vaccine, Spikevax, which leverages its groundbreaking mRNA platform. This technology allows for the rapid development of vaccines and therapies across various disease areas.
Most recently, Moderna concentrated on broadening its product pipeline beyond COVID-19, targeting respiratory diseases and cancer therapies. The success of this expansion and the effective transition to an endemic market for COVID-19 are key to its continued success. It aims to sustain revenue by diversifying its mRNA-driven products and leveraging its already strong position in the U.S. COVID-19 vaccine market.
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Key Data Points
Third Quarter Highlights and Challenges
Moderna's positive EPS of $0.03 for the quarter significantly surpassed the analyst forecast of a loss of $1.94 per share. This positive result was helped by its latest COVID-19 vaccine getting FDA approval three weeks earlier than expected, allowing the company to meet demand in Q3 rather than in Q4 as was expected. The improvement is also tied to operational efficiencies that are reflected in its cost of sales, which saw a sharp 77% reduction year over year. Moderna management noted fewer inventory write-downs as well.
The company's revenue from its COVID-19 vaccine, Spikevax, was $1.8 billion with $1.2 billion of that sold in the U.S. International sales lagged due to timing constraints of government approvals. Meanwhile, sales of the RSV vaccine mRESVIA underperformed at $10 million, affected by late market entry leading to missed ordering periods, despite approvals in the U.S. and European Union.
Moderna also made substantial progress in cost management, with R&D and Selling, General, and Administrative (SG&A) expenses decreasing by 2% and 36% respectively. The company continues to streamline operations, enabling it to enhance cash flow and reduce loss.
Significant efforts were made to advance its product pipeline. Notably, its Phase 3 trials for norovirus and influenza vaccines mark key milestones in expanding its portfolio. Such diversification aims to secure future revenue streams beyond its current COVID-centric portfolio. Management remains committed to introducing more mRNA-based products with a target of 10 approvals over the next three years.
Forward Outlook
Looking ahead, Moderna still expects its net product sales guidance for 2024 to come in between $3.0 billion to $3.5 billion. This projection reflects expectations for ongoing sales from Spikevax and future product approvals, balancing cost controls with strategic investments in its pipeline. Management forecast full-year research & development costs to range from $4.6 billion to $4.7 billion, down from prior guidance of $4.8 billion.
Investors should keep an eye on Moderna's commercial strategies and market adaptation, particularly how it maneuvers in the highly competitive vaccine landscape. Its focus remains on enhancing operational efficiencies and scaling its infrastructure to support new products, both in respiratory vaccines and oncology treatments.
