Moderna's stock drops over 10% after cutting EU sales forecast and facing challenges in the US vaccine market.

• Moderna reported better-than-expected financial results for the second quarter, with revenue that surpassed estimates and a narrower loss than anticipated.
• The company reduced its full-year sales forecast due to decreased sales in Europe, intense competition for respiratory vaccines in the U.S., and the possibility of delayed international revenue until 2025.
• The biotech company has revised its revenue forecast for 2024, expecting it to fall between $3 billion and $3.5 billion, a decrease from its previous projection of $4 billion.

The company reported second-quarter revenue that exceeded expectations but reduced its full-year sales forecast due to lower anticipated sales in Europe, intense competition for respiratory vaccines in the U.S., and the possibility of delayed international revenue until 2025.

The biotech company has revised its revenue forecast for 2024, expecting it to fall between $3 billion to $3.5 billion, a decrease from its previous projection of $4 billion.

Shares of the company fell 10% in premarket trading Thursday.

Moderna has started shipping doses of its vaccine for respiratory syncytial virus, called mRESVIA, in the U.S. after its approval in May for older adults. This is Moderna's second-ever commercially available product, following its Covid vaccine, which has seen demand decrease as the world emerges from the pandemic and relies less on protective shots and treatments.

The CEO of Moderna, Stephane Bancel, stated that there has been a higher level of competition for both RSV and Covid vaccines. He pointed out that mRESVIA is the third RSV vaccine to be introduced, following shots from and , with the latter having dominated the market the previous year.

To obtain Covid vaccine supply from Moderna, we've been having intense discussions with governments across Europe.

Some countries have informed us that due to a tight budget, they cannot purchase more vaccine than they require because they already have a contract.

The European Union's massive renegotiated Covid vaccine supply contract with its German partner is being referred to by him, as well as the ongoing war in Ukraine, which is putting a strain on government budgets.

Bancel stated that Moderna anticipates resuming sales growth in 2025 and achieving profitability by 2026 through the introduction of new products.

Based on a survey of analysts by LSEG, Moderna's second-quarter performance exceeded Wall Street's expectations.

• Loss per share: $3.33 vs. loss of $3.39 expected
• Revenue: $241 million vs. $132 million expected

In the second quarter, Moderna recorded $241 million in revenue, a 37% decrease from the same period the previous year. In comparison, the company generated $344 million in revenue during the prior-year period.

Although the company stated that the revenue decline was partly due to the anticipated shift to a seasonal Covid vaccine market, where patients usually receive their shots in the fall and winter, Bancel announced that Moderna had a successful spring season in the U.S. for seniors, who are advised to receive an additional dose of the latest round of Covid shots.

In the second quarter, Moderna recorded a net loss of $1.28 billion, which amounts to $3.33 per share, lower than the $1.38 billion loss, or $3.62 per share, reported in the previous year.

Bancel stated that the company's cost-cutting progress helped it lose less than expected by Wall Street.

"Moderna had more sales than anticipated, but also more cost savings than expected, which made me happy with our progress," he said.

The cost of sales decreased by 84% compared to the previous year, with $14 million in write-downs and $55 million in charges related to manufacturing footprint reduction.

The increase in research and development expenses for the second quarter was mainly due to higher personnel costs, resulting in a 6% rise to $1.2 billion compared to the same period in 2023.

The company's SG&A expenses decreased by 19% to $268 million in the third quarter of 2023 compared to the second quarter of the same year. These expenses typically cover the costs of promoting, selling, and delivering a company's products and services.

Despite concerns about Moderna's future, its shares have risen by nearly 20% this year due to growing confidence in its pipeline and messenger RNA platform, which is the technology used in its Covid vaccine and RSV shot.

The biotech company currently has 45 products in development, including a combination shot targeting Covid and the flu, which could win approval as early as 2025.

Besides a stand-alone flu shot and personalized cancer vaccine, Moderna is also working on shots for latent viruses, in addition to other products.