Moderna Gains on Sharp Cost Cuts as Covid Vaccine Declines

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(Bloomberg) — Moderna Iny. shares rose after the company posted a narrower third-quarter loss than Wall Street expected, a sign that its cost-cutting measures are helping offset the decline of its Covid business.

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The company posted a net loss of 51 cents a share, against Wall Street’s expectation for a loss of $2.21. 

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Moderna has aggressively reduced costs through measures including staff cuts and lower spending on research and manufacturing to offset slowing vaccine sales. The company still has a goal of breaking even by 2028, Moderna Chief Financial Officer Jamey Mock said in an interview.

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Moderna reported third-quarter sales of $1 billion, almost entirely from its Covid vaccine. While that was a 45% decline from a year ago, it also topped analysts’ expectations. 

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Moderna shares rose 4.4% at 7:17 a.m. in premarket trading in New York. They were down 43% on the year through Wednesday’s close, while the S&P 500 index had gained almost 16%.

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Moderna has struggled since the pandemic as demand for Covid vaccines has slipped, with confusion over federal policies adding to the company’s difficulties. Efforts to develop other products have also faced challenges. 

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The company now projects sales of between $1.6 billion and $2 billion, narrower than the previous range that topped out at $2.2 billion. Analysts expect revenue of nearly $1.9 billion this year, according to the average of estimates compiled by Bloomberg. 

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The vaccine maker already lowered the top end of its forecast for 2025 in August, saying it was because some shipments of its Covid vaccine were pushed back to early next year. That was on top of another guidance reduction in January, which sent shares plunging. 

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The third quarter included the start of the US vaccination season, giving investors their first look at how Moderna’s Covid business has been affected by new guidelines created by US officials led by Health Secretary Robert F. Kennedy Jr., a vaccine critic. 

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The Food and Drug Administration approved Covid vaccines for a smaller group of people than last year, and an influential group of vaccine advisers, chosen by Kennedy, has sowed uncertainty over who can get Covid shots. 

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The panel, called the Advisory Committee on Immunization Practices, gave their recommendations in mid-September, voting to end universal access to Covid shots and require Americans to confer with a medical professional before getting the vaccine. In early October, the Centers for Disease Control and Prevention formally adopted the recommendations. 

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Public health experts have worried that the new policies, a departure from the universal recommendations a year ago, will lead to fewer people getting vaccinated. Several states have tried to counter the panel’s recommendations by creating their own Covid vaccine guidelines to ensure the shots are widely available this fall.