Moderna Slashes 2024 Sales Forecast: What It Means for Your Portfolio
By Patrick Wingrove and Leroy Leo
Moderna's 2024 Vaccine Sales Forecast Slashed by 25%: Implications for Investors
(Multibagger) – On Thursday, Moderna (NASDAQ: MRNA) announced a significant reduction in its 2024 sales forecast for COVID-19 and respiratory syncytial virus (RSV) vaccines, projecting a cut by up to 25%, or $1 billion. This revision stems partly from continued low COVID vaccine sales to the European Union, expected to persist until 2026.
The announcement prompted Moderna’s shares to plummet by over 15%, closing at $101.01, thereby reducing the company’s market value to $38.71 billion. This is a stark contrast to its peak market value of nearly $200 billion during the height of the COVID-19 pandemic in August 2021.
Factors Contributing to the Forecast Cut
Moderna's revised forecast accounts for potential revenue deferrals for some international COVID sales into 2025 and an increasingly competitive market for COVID and RSV vaccines in the U.S. Previously, the company anticipated around $4 billion in sales for 2024, which was already the lowest annual revenue figure since the launch of its COVID vaccine in late 2020. The new forecast places expected sales between $3 billion and $3.5 billion.
Chief Financial Officer James Mock highlighted that international revenue deferrals significantly influenced the $500 million range in the new 2024 sales forecast. During a conference call, CEO Stephane Bancel noted that low COVID vaccine sales in the EU are expected for the next two years, constrained by Pfizer's (NYSE: PFE) ongoing contract with the region, which extends until 2026.
Despite these challenges, Bancel mentioned ongoing discussions with European countries interested in diversifying their COVID vaccine options beyond the Pfizer/BioNTech shot. Mock also indicated ongoing negotiations with the EU concerning 2024.
U.S. Market Assumptions and New Revenue Streams
Moderna is also assuming that U.S. COVID vaccination rates for the autumn campaign with updated shots will mirror last year’s figures. The company is counting on revenue from newer mRNA shots, including its RSV vaccine mRESVIA and an experimental COVID-flu combination vaccine.
Jefferies analyst Michael Yee noted in a research report that the new forecast implies an increase in the company’s net loss and cash burn, which are already at levels that concern investors. Moderna anticipates ending the year with $9 billion in cash, down from $13.3 billion at the end of 2023, and expects to have $6 billion to $7 billion by the end of 2025.
Performance of New Products and Financial Impact
Analysts had projected $370 million in sales for mRESVIA, which received U.S. approval in late May. Although shipments began last month, mRESVIA is expected to lag behind RSV shots from Pfizer and GSK.
Moderna's Spikevax COVID-19 vaccine sales for the quarter reached $184 million, a 37% decrease from the previous year but significantly higher than analysts' average estimates of $66.42 million. The company reported a net loss of $1.3 billion, or $3.33 per share, for the second quarter, slightly better than analysts' expectations of a $3.39 per share loss.
Breakdown for Easy Understanding:
- Sales Forecast Cut: Moderna has reduced its 2024 sales forecast for COVID-19 and RSV vaccines by up to 25%, due to low sales in the EU and increased competition in the U.S.
- Stock Impact: This news caused Moderna's shares to drop by more than 15%, significantly lowering its market value.
- Revenue Projections: The company now expects to make between $3 billion and $3.5 billion in sales for 2024, down from an earlier forecast of $4 billion.
- International Challenges: One major factor is the deferral of international revenue and an ongoing contract between the EU and Pfizer, limiting Moderna’s sales opportunities in Europe.
- U.S. Market: Moderna is relying on similar U.S. COVID vaccination rates as last year and is introducing new mRNA shots to boost revenue.
- Financial Health: Analysts predict an increase in net loss and cash burn for Moderna, with the company expecting to have $9 billion in cash by the end of 2023, decreasing to between $6 billion and $7 billion by the end of 2025.
- Product Performance: Sales of Moderna's new RSV vaccine mRESVIA and the Spikevax COVID-19 vaccine were below expectations, contributing to the financial strain.
Implications for You:
If you are an investor, these developments suggest increased financial volatility for Moderna in the near term. Diversifying your portfolio or closely monitoring Moderna's performance and strategic moves could be prudent. Understanding these shifts can help you make informed decisions about your investments and anticipate market trends.Optimized for SEO with RankMath:
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