Moderna Struggles With Weaker COVID-19 Vaccine Demand, Expects To Return To Growth In 2025, Stock Plunges

Moderna Inc MRNA shares are trading lower after the company reported a deeper Q3 loss of $(9.53), down from EPS income of $2.53. The analysts' estimate stood at $(1.93).

The company's Q3 sales reached $1.8 billion (all from COVID-19 vaccine), beating the consensus of $1.4 billion and down from $3.4 billion a year ago.

Q3 cost of sales was $2.2 billion. Moderna said it made substantial progress during the quarter in resizing its COVID-19 manufacturing footprint to accelerate gross margin expansion toward its longer-term target of 75-80%. 

In addition to $0.4 billion in unit-driven manufacturing, distribution cost, and royalties, the remaining $1.9 billion includes $1.3 billion for inventory write-downs related to excess and obsolete COVID-19 vaccine. 

"During the pandemic, we were obsessed about scaling up manufacturing to make as many doses as we could to help as many people as we could. And now that we're moving into an endemic setting, it is important to resize the company," Bancel said on CNBC's "Squawk Box" on Thursday.

Outlook: Moderna says that the U.S. market for fall 2023 for the COVID-19 vaccine will be at least 50 million doses, supporting total 2023 Spikevax sales of at least $6 billion compared to prior guidance of $6 billion-$8 billion. 

Write-downs/charges are expected to be less than 10% of sales in 2024 and beyond. Moderna's resized footprint is now better positioned to scale with volume. 

Moderna is projecting approximately $4 billion in sales in 2024, mostly in the second half of the year, primarily due to COVID-19 vaccine global sales and the launch of its RSV vaccine. In 2025, the company expects to return to organic sales growth.

At a $4 billion sales level, the company expects the cost of sales to be approximately 35%, reducing to approximately 30% at $6 billion of sales and 20-25% at higher sales levels.

Price Action: MRNA shares are down 15.90% at $64.05 on the last check Thursday.