Moderna's stock price drops by 18% following a $1 billion reduction in its 2025 sales forecast.

• Moderna reduced its 2025 sales forecast by approximately $1 billion while reducing expenses.
• The biotech company anticipates that its 2025 revenue will fall between $1.5 billion and $2.5 billion, with the majority of the earnings generated in the latter half of the year.
• After experiencing a decline in demand for its Covid vaccine, Moderna is now charting a course for the future.

The biotech company lowered its 2025 sales guidance by roughly $1 billion on Monday due to potential headwinds later this year, while continuing to cut costs and expand its portfolio.

Moderna anticipates 2025 revenue to fall between $1.5 billion and $2.5 billion, with most of the earnings generated in the second half of the year. The majority of these sales will stem from Moderna's Covid-19 vaccine and its newly launched vaccine for respiratory syncytial virus, as stated in a press release.

The company's revenue forecast range has been revised from $2.5 billion to $3.5 billion, and the break-even date on an operating cash basis has been pushed back from 2026 to 2028.

On Monday, Moderna's shares dropped 18% in premarket trading, while other vaccine stocks also experienced declines. Novavax fell 6%, BioNTech decreased by 3%, and Pfizer experienced a slight decrease.

"Moderna CFO Jamey Mock stated on CNBC that as we approach 2025, there are several uncertainties that we are preparing for, which we currently anticipate to be headwinds. However, they could potentially turn out to be tailwinds."

Moderna's share of the U.S. retail market for Covid shots decreased from 48% in 2023 to 40% at the end of 2024, and the company is anticipating another decline this year, according to Mock. He pointed out four factors that could impact sales, including increased competition in the Covid market.

Under a new agreement, he will co-commercialize 's Covid vaccine worldwide, potentially making that shot more competitive.

The second factor contributing to the decline in vaccination rates in the U.S. retail market in fall 2024 was a 7% drop overall compared to the same time in 2023. The last two factors were the timing of manufacturing contracts with several countries and the uncertainty surrounding the recommendations of advisors to the Centers for Disease Control and Prevention for RSV revaccination.

The company aims to cut cash cost expenses by $1 billion in 2025 and another $500 million in 2026, as noted by Mock.

""We are investing and diversifying our portfolio," Mock said."

Moderna is announcing its plans to move forward after experiencing a decline in demand for its Covid-19 vaccine, which was its only commercially available product until it introduced its RSV shot last year. This announcement comes before Moderna's presentation at the annual JPMorgan Healthcare Conference, a major event for the healthcare industry that attracts thousands of executives and is known for its deal-making activity.

Moderna's two shots generated revenue of approximately $3 billion to $3.1 billion in 2024, exceeding its forecast. The company attributed this success to the earlier approval of its updated Covid shot in the U.S. in November 2023 compared to the previous version.

The sales of Moderna's Covid shot in 2023 and 2022 were significantly higher than the sales in 2023, as fewer people got updated jabs.

Moderna aims to expand its product line with 10 new approvals in the next three years, including a combination shot for Covid and the flu and a "next-generation" Covid shot, with the potential for three approvals in 2025 alone.

The company is placing its faith in a pipeline centered on its messenger RNA platform, which is the same technology utilized in its Covid vaccine and RSV shot.