Moderna reports a surprise profit due to strong sales of Covid-19 vaccine, with cost-cutting measures being implemented.

• On Thursday, Moderna reported a surprise profit for the third quarter, exceeding Wall Street estimates, due to its cost-saving measures and higher-than-expected sales of its Covid vaccine.
• Moderna announced on Thursday that its latest Covid-19 vaccine has shown benefits, three weeks earlier than the previous version of the shot did in 2023.
• The second commercially available product from Moderna, its vaccine against respiratory syncytial virus, was included in the first quarter's sales.

On Thursday, the company posted a surprise profit for the third quarter, exceeding Wall Street estimates, due to its cost-cutting efforts and higher-than-expected sales of its Covid vaccine.

The biotech company's net income for the third quarter was $13 million, or 3 cents per share, which is a significant improvement from the net loss of $3.63 billion, or $9.53 cents per share, reported in the year-ago period.

Shares of Moderna rose almost 9% in premarket trading Thursday.

Moderna is cutting costs with a goal of saving $1.1 billion by 2027 as it tries to recover from the decline of its Covid business. This is the first quarter that includes sales of Moderna's RSV vaccine, its second commercially available product.

The company intends to submit an application for the approval of its experimental "next-generation" Covid vaccine and combination shot before the end of the year. Additionally, Moderna anticipates filing for expanded approval of its RSV vaccine targeting high-risk adults aged 18 to 59 this year.

Moderna announced on Thursday that its latest Covid-19 vaccine has shown benefits after receiving approval in the US three weeks earlier than the previous version of the shot did in 2023. This allowed the biotech company to "meet demand more effectively" by shipping out doses to pharmacies and healthcare providers and reaching more patients sooner.

According to Moderna CEO Stéphane Bancel, the early launch and steeper ramp led to a significantly higher sales number for the Covid vaccine. In the first week of the vaccine's launch, the company shipped twice as many products globally as it did in 2023, Bancel stated in an interview.

He stated that "we will continue to implement cost reduction measures."

Based on a survey of analysts by LSEG, Moderna's third-quarter results differed from Wall Street's expectations.

• Earnings per share: 3 cents vs. an expected loss of $1.90
• Revenue: $1.86 billion vs. $1.25 billion expected

In the third quarter, Moderna recorded $1.86 billion in sales, only slightly higher than the $1.83 billion it achieved in the same period last year. The majority of this revenue came from its Covid shot, with $1.2 billion in U.S. sales and approximately $600 million from international markets.

The company's third-quarter revenue included $10 million in U.S. sales of its RSV shot, which was approved in May. However, Moderna stated that sales of that shot were lower than expected due to its approval and recommendation by regulators later in the contracting season, when many vaccine distributors had already completed their orders.

The RSV vaccine was predicted to generate $132 million in sales by analysts, based on StreetAccount's compiled estimates. Moderna's RSV vaccine has already been approved in several countries, including the U.S., European Union, Norway, Iceland, and Qatar.

The company maintained its full-year 2024 product sales guidance of approximately $3 billion to $3.5 billion, despite Moderna's recent reduction in its sales outlook in Europe and the competitive environment for respiratory vaccines in the U.S. Additionally, the potential for deferred international revenue into 2025 was also considered.

The stock price of Moderna has decreased by nearly 50% in 2021 as investors contemplate the company's future direction following the Covid pandemic. Moderna is focusing on its pipeline, which is centered on its messenger RNA platform, the technology utilized in its Covid vaccine and RSV shot.

The company anticipates launching 10 new products in the next three years, with a total of 45 products currently in development.

Moderna is working on a range of products, including a standalone flu shot, a personalized cancer vaccine with Merck, and shots for latent viruses.

The cost of sales for the third quarter was $290 million, a 77% decrease from the same period last year. This includes $214 million in write-downs of unused doses of the Covid vaccine and $27 million in charges related to the company's efforts to reduce its manufacturing footprint.

The decline in research and development expenses by 2% to $1.1 billion compared to the previous year was mainly due to lower clinical development and manufacturing costs, according to Moderna. The company attributed this decline to decreased spending on clinical trials and other factors.

The expenses related to promoting, selling, and delivering a company's products and services decreased by 36% to $281 million in the fourth quarter of 2023 compared to the third quarter of the same year.