Moderna, an American star vaccine company whose market value soared during the COVID-19 period, is stepping down the "altar". The company announced at its annual R&D Day investor conference held in New York on September 12th that it would cut more than $1 billion in R&D expenses, causing the company's stock price to plummet by more than 12% that day, hitting a four-year low.
As of the closing of the US stock market on September 12, the market value of Moderna was only about $26.8 billion, about three quarters lower than the peak value of $100 billion during the COVID-19 period.
Stephane Bancel, CEO of Moderna, stated at an investor meeting that the company needs to "control the pace" and maintain "consistency" in its research and development investments.
Due to the rapid decline of COVID-19 vaccine business, Moderna plans to reduce its R&D expenditure by 1.1 billion dollars to 3.6 billion dollars to 3.8 billion dollars by 2027, lower than the previously estimated 4.8 billion dollars.
The company stated that it is reducing the priority of some products in its product line, suspending research and development work on some potential product combinations, and abandoning the development of other products. Moderna expects to have 10 new products approved by 2027.
The company expects its revenue to reach $2.5 billion to $3.5 billion in 2025, lower than analysts' forecast of $3.74 billion and lower than the expected sales of $3 billion to $3.5 billion in 2024. Moderna stated that with the launch of more new products, the compound annual growth rate from 2026 to 2028 will exceed 25%.
Market participants view Moderna's significant reduction in research and development as a "deterioration of its financial condition" and believe that its business is unlikely to rebound in the short term. Securities firm Leerink Partners analyst Mani Foroohar said in a report on Thursday, "In terms of time, the R&D cuts have been too significant. We believe this has proven that the company cannot predict the continued performance of its business
Michael Yee, an analyst at investment bank Jefferies, pointed out in another research report that most of the company's cost reductions will not be achieved until 2027, and the institution has postponed Moderna's profitability to 2028.
Moderna previously stated that it expects to achieve a balance between revenue and expenditure and resume growth by 2026. Moderna's Chief Financial Officer Jamey Mock told investors that although Moderna expects some of its products to be approved by 2025, the company expects to generate meaningful revenue only in 2026.
At present, in addition to COVID-19 vaccine, a respiratory syncytial virus (RSV) vaccine of Moderna has been approved by the US FDA four months ago, becoming the second product of the company to go on the market. However, Mock said that the market demand for COVID-19 vaccine and RSV vaccine is facing greater uncertainty.
It is reported that in the R&D pipeline of Moderna, there have been five respiratory vaccines that have achieved positive results in phase III clinical trials. It is expected that three of them will be submitted for approval this year, including Moderna's combined vaccine against COVID-19 and influenza, and a newer and more effective COVID-19 vaccine.
Moderna's other product lines also include five non respiratory products, involving cancer, latent viruses, and rare diseases, and are expected to receive approval in 2027.
Bansell stated that the company's success rate in developing drugs from clinical phase one to clinical phase three is six times higher than other biotechnology and pharmaceutical industry companies.
Moderna recently announced that its vaccine against Norovirus will immediately enter the third clinical trial phase. Bansell expects the clinical trial to be completed within one year, and if the data is positive, regulatory approval will be submitted immediately, with plans to launch it within two years. In addition, Moderna plans to submit a joint vaccine application to prevent COVID-19 and influenza this year.
It is worth noting that in July last year, Moderna announced an investment in a vaccine production base in China, with a maximum investment scale of $1 billion. Last November, the factory started construction in Shanghai, covering production and research and development, covering the entire chain from drug substances, drugs to personalized new antigen production.
The first financial reporter asked Moderna whether the Shanghai factory was affected by the R&D reduction plan, but the relevant person in charge did not give a clear response.
In terms of investment expenditure, Moderna invested $100 million to establish Merina (China) Biotechnology Co., Ltd. in China in May last year. Last August, Merina (China) Biotechnology Co., Ltd. invested 250 million yuan to establish Merina (Shanghai) Pharmaceutical Co., Ltd. with 100% ownership.
The first financial reporter also found that Moderna is expanding its pharmaceutical research and development and trade consulting business in China. In December last year, Meide Na invested 11 million RMB to hold 100% of Meide Na (Beijing) Pharmaceutical Consulting Co., Ltd. In September and November of last year, Meide Na invested 4 million RMB respectively, holding 100% of Meide Na (Shanghai) Pharmaceutical R&D Co., Ltd. and Meide Na (Shanghai) Pharmaceutical Trading Co., Ltd.
In addition, in July of this year, the legal representative of Merina (China) has been changed from Christoph Brackmann to Jed Davidson Larkin. Larkin is the production manager of Moderna company.
The First Financial News reporter learned that Moderna had previously given great confidence to the Chinese market, and the company had planned to conduct clinical trials of as many products as possible in China to drive the company's next phase of growth. Bansell attended the opening ceremony of the Shanghai International Import Expo in November last year.