01—Abstract
Summary
Summary of the 10-K filed March 13, 2019. Cited figures are marked; the original filing is the authoritative source.
Moderna, Inc.'s 2018 10-K filing reveals a company heavily invested in research and development of mRNA therapeutics and vaccines, with a significant pipeline of 20 development candidates, 11 of which are in clinical studies.
The company operates as an Emerging Growth Company (EGC), allowing for reduced disclosure requirements. Financially, Moderna reported substantial net losses for 2018, 2017, and 2016, with total revenues driven by collaboration and grant revenue, not product sales. Despite ongoing losses, the company raised significant capital, including a successful IPO in December 2018, resulting in substantial cash, cash equivalents, and investments.
Key financial and operational focuses for investors include the company's substantial R&D expenses, its reliance on strategic alliances with major pharmaceutical companies like AstraZeneca and Merck, and its need for continued funding through equity or debt offerings. The company's long-term strategy emphasizes platform development, with a goal of addressing a broad spectrum of diseases.
Investors should note Moderna's stated intention to retain all future earnings for growth, meaning no cash dividends are anticipated in the foreseeable future. The filing also highlights significant risks, including potential stock price volatility due to the large number of shares eligible for sale after lock-up periods expire and the company's dependence on future capital raises.
02—Key points
Key Highlights
- Moderna is a clinical-stage biotechnology company focused on mRNA therapeutics and vaccines with a pipeline of 20 development candidates, 11 of which are in clinical trials.
- The company reported net losses for the years ended December 31, 2018, 2017, and 2016, totaling $384.7 million, $255.9 million, and $216.2 million, respectively.
- Total revenues in 2018 were $135.1 million, a decrease from $205.8 million in 2017, primarily driven by collaboration and grant revenue, not product sales.
- Moderna completed its Initial Public Offering (IPO) in December 2018, raising approximately $563 million in net proceeds, and held $1.7 billion in cash, cash equivalents, and investments as of December 31, 2018.
- Research and development expenses were a significant portion of operating expenses, increasing to $454.1 million in 2018 from $410.5 million in 2017.
- The company has established strategic alliances with major biopharmaceutical companies including AstraZeneca, Merck, and Vertex Pharmaceuticals.
- Moderna does not anticipate paying cash dividends in the foreseeable future, intending to reinvest all earnings into business growth and development.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed March 13, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $135.07M$205.82M | −34.4% |
| Cost of Revenue | $0— | — |
| Gross Profit | $135.07M— | — |
| R&D Expenses | $454.08M$410.46M | +10.6% |
| Operating Expenses | $548.33M$475.18M | +15.4% |
| Operating Income | -$413.27M-$269.36M | −53.4% |
| Net Income | -$384.73M-$255.92M | −50.3% |
| EPS (Basic) | $-4.95$-4.18 | −18.4% |
| Shares Outstanding (Basic) | 81.11M64.50M | +25.8% |
05—Questions
Frequently Asked Questions
What is Moderna's primary business focus and stage of development?
Moderna is a clinical-stage biotechnology company focused on developing and commercializing a new generation of transformative medicines based on messenger RNA (mRNA) technology. As of the filing date, the company had 20 development candidates, with 11 in clinical studies, targeting infectious diseases, immuno-oncology, rare diseases, and cardiovascular diseases.
What was Moderna's financial performance in 2018?
In 2018, Moderna reported total revenue of $135.1 million, a decrease from $205.8 million in 2017. The company incurred a net loss of $384.7 million in 2018, an increase from $255.9 million in 2017. Despite the losses, the company had $1.7 billion in cash, cash equivalents, and investments at the end of 2018, bolstered by its IPO.
How does Moderna fund its operations and development?
Moderna has historically funded its operations primarily through the sale of equity instruments, strategic alliances, and grant agreements. The company completed an Initial Public Offering (IPO) in December 2018, raising substantial capital. It plans to continue financing future operations through public or private equity or debt offerings, government funding, and strategic alliances, as it does not expect significant product sales revenue in the near future.
What are the key risks highlighted in the filing regarding Moderna's stock?
Key risks include the potential for stock price decline due to substantial amounts of existing stockholders' shares becoming eligible for sale after lock-up periods expire. Additionally, the company's reliance on raising additional capital could lead to dilution for existing stockholders or unfavorable terms. The trading market for its common stock may not be sustained, and the company does not anticipate paying dividends, meaning capital appreciation is the sole potential source of gain.
06—Continue