01—Abstract
Summary
Summary of the 10-Q filed May 9, 2019. Cited figures are marked; the original filing is the authoritative source.
Moderna, Inc.'s Form 10-Q for the quarter ended March 31, 2019, highlights the company's ongoing transition to a public entity and its adoption of new accounting standards, particularly ASC 606 for revenue recognition.
The report details significant revenue shifts due to ASC 606, impacting deferred revenue and accumulated deficit. The company continues to invest heavily in research and development, reporting an increase in R&D expenses, driven by personnel costs and clinical trial activities. Moderna maintains a substantial cash position, exceeding $1.5 billiona, funded through equity offerings and strategic alliances, which are crucial for advancing its diverse pipeline of 21 development candidates across various therapeutic areas.
Financially, Moderna reported a net loss of $132.7 millionb for the quarter, a significant increase from the prior year, largely due to higher R&D expenses and the impact of adopting ASC 606. While collaboration revenue decreased year-over-year, partly due to ASC 606's revenue recognition adjustments, the company's strategic alliances with major pharmaceutical companies like Merck, AstraZeneca, and Vertex remain central to its operational funding and pipeline advancement. Moderna's pipeline shows progress with several candidates in early-stage clinical trials, emphasizing the company's long-term focus on mRNA technology despite continued operating losses and the need for substantial future funding.
02—Key points
Key Highlights
- Adoption of ASC 606 (Revenue from Contracts with Customers) on January 1, 2019, resulted in a $28.0 million adjustment to accumulated deficit and altered revenue recognition, particularly impacting deferred revenue.
- Total revenue for the three months ended March 31, 2019, decreased by 45% to $16.0 million, primarily due to a reduction in collaboration revenue from strategic alliances, influenced by ASC 606.
- Research and development expenses increased by 45% to $130.6 million, driven by higher personnel costs, stock-based compensation, and increased clinical trial and manufacturing expenses.
- Moderna ended the quarter with a strong liquidity position, holding $1.5 billion in cash, cash equivalents, and investments.
- The company reported a net loss of $132.7 million for the quarter, an increase from $72.4 million in the prior year's comparable period, reflecting increased R&D investments and operational costs.
- Moderna continues to advance its pipeline of 21 development candidates, with 11 in early-stage clinical studies across various therapeutic areas like prophylactic vaccines, cancer vaccines, and immuno-oncology.
- Significant progress was noted in the RSV vaccine program with Merck, including the IND submission for mRNA-1172 and advancements in clinical trial enrollment for other candidates like CMV vaccine.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2019filed May 9, 2019Financial Statements
Q1 FY2019 against Q1 FY2018
| Line item | Q1 FY2019Q1 FY2018 | Change |
|---|---|---|
| Revenue | $16.02M$29.04M | −44.8% |
| R&D Expenses | $130.41M$90.12M | +44.7% |
| Operating Expenses | $157.67M$106.44M | +48.1% |
| Operating Income | -$141.64M-$77.40M | −83.0% |
| Net Income | -$132.58M-$72.38M | −83.2% |
| EPS (Basic) | $-0.40$-1.16 | +65.5% |
| Shares Outstanding (Basic) | 328.81M65.43M | +402.5% |
05—Questions
Frequently Asked Questions
How has the adoption of ASC 606 impacted Moderna's financial reporting?
The adoption of ASC 606, effective January 1, 2019, has significantly changed how Moderna recognizes revenue. It led to a cumulative-effect adjustment of $28.0 million to the accumulated deficit and reduced deferred revenue. This new standard impacts the timing and amount of revenue recognized from collaboration agreements, leading to a decrease in reported collaboration revenue for the quarter compared to the previous year, as revenue is now recognized based on performance obligations being satisfied rather than cash received or other previous methods.
What is driving the increase in Research and Development (R&D) expenses?
R&D expenses increased by 45% year-over-year, primarily due to increased personnel-related costs resulting from a larger R&D workforce, higher stock-based compensation expenses, and increased costs associated with clinical trials and manufacturing activities for its diverse pipeline of mRNA candidates.
How is Moderna funding its operations and continued development?
Moderna is primarily funding its operations and development through a combination of strategic alliances with major pharmaceutical companies (like Merck, AstraZeneca, and Vertex), government funding (e.g., BARDA, DARPA), and prior equity financings, including proceeds from its Initial Public Offering (IPO) in December 2018. The company holds a substantial cash reserve of $1.5 billion as of March 31, 2019, which is expected to fund operations for at least the next 12 months, but anticipates needing additional capital for future growth.
What is the status of Moderna's key development programs?
Moderna has a pipeline of 21 development candidates, with 11 in early-stage clinical studies. Key programs mentioned include the RSV vaccine candidate (mRNA-1172) in collaboration with Merck, which has submitted an IND for a Phase 1 study. Other programs like the CMV vaccine (mRNA-1647) are enrolling in Phase 1 trials, and the company continues to advance its cancer vaccine and immuno-oncology candidates.
06—Continue