01—Abstract
Summary
Summary of the 10-Q filed November 3, 2023. Cited figures are marked; the original filing is the authoritative source.
Moderna, Inc. reported a significant financial shift in the third quarter of 2023, moving from a period of strong profitability driven by COVID-19 vaccine sales to a net loss.
Total revenue for the three months ended September 30, 2023, was $1.83 billiona, a decrease of 46% compared to the prior year, primarily due to a 44% decline in net product sales from COVID-19 vaccines. This decline reflects the market's transition from pandemic conditions to an endemic, seasonal market. The company incurred a net loss of $3.63 billion for the quarter, a substantial change from the $1.04 billion net income in the same period last year.
This loss was largely driven by a strategic initiative to optimize its COVID-19 business cost structure, resulting in $1.4 billionb in charges, including inventory write-downs and contract manufacturing organization (CMO) wind-down costs. Research and development expenses also increased by 41% year-over-year as Moderna continues to invest in its diverse pipeline. Despite the quarterly loss, Moderna maintains a strong liquidity position with $2.93 billion in cash and cash equivalents and $4.64 billion in current investments as of September 30, 2023.
The company is actively managing its transition away from pandemic-level COVID-19 vaccine sales by investing in its broader pipeline, including potential vaccines for RSV, influenza, CMV, and advancing its personalized cancer vaccine program. The substantial increase in R&D spending highlights the company's commitment to long-term growth beyond its initial COVID-19 vaccine success.
02—Key points
Key Highlights
- Revenue declined significantly by 46% to $1.83 billion for Q3 2023, driven by a 44% drop in COVID-19 vaccine net product sales as the market shifts to an endemic phase.
- Moderna reported a net loss of $3.63 billion for Q3 2023, a sharp contrast to the $1.04 billion net income in Q3 2022, largely due to $1.4 billion in charges from a strategic initiative to optimize COVID-19 cost structure.
- Cost of sales increased by 104% year-over-year to $2.24 billion in Q3 2023, heavily impacted by inventory write-downs and strategic restructuring charges related to the COVID-19 vaccine business.
- Research and Development (R&D) expenses increased by 41% to $1.16 billion in Q3 2023, reflecting continued investment in the company's broad pipeline, including RSV, flu, CMV, and cancer vaccines.
- The company maintains a solid liquidity position, with $2.93 billion in cash and cash equivalents and $4.64 billion in current investments as of September 30, 2023.
- Moderna received FDA approval for its updated Omicron XBB.1.5 COVID-19 vaccine and continues to advance other key pipeline candidates, including its RSV vaccine (mRNA-1345) and a combination flu/COVID-19 vaccine (mRNA-1083).
- The company's stock-based compensation expense increased to $77 million for Q3 2023, up from $70 million in Q3 2022, reflecting ongoing equity incentives.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2023filed November 3, 2023Financial Statements
Q3 FY2023 against Q3 FY2022
| Line item | Q3 FY2023Q3 FY2022 | Change |
|---|---|---|
| Revenue | $1.83B$3.36B | −45.6% |
| Cost of Revenue | $2.24B$1.10B | +103.7% |
| Gross Profit | -$410.00M$2.26B | −118.1% |
| R&D Expenses | $1.16B$820.00M | +41.5% |
| Operating Expenses | $3.84B$2.20B | +74.8% |
| Operating Income | -$2.01B$1.17B | −272.6% |
| Net Income | -$3.63B$1.04B | −448.0% |
| EPS (Basic) | $-9.53$2.67 | −456.9% |
| EPS (Diluted) | $-9.53$2.53 | −476.7% |
| Shares Outstanding (Basic) | 381.00M390.00M | −2.3% |
| Shares Outstanding (Diluted) | 381.00M412.00M | −7.5% |
05—Questions
Frequently Asked Questions
What is the primary driver behind Moderna's significant net loss in the third quarter of 2023?
The primary driver for the net loss of $3.63 billion in Q3 2023 was a strategic initiative undertaken by Moderna to optimize the cost structure of its COVID-19 business. This initiative resulted in $1.4 billion in charges, which included significant inventory write-downs and contract manufacturing organization (CMO) wind-down costs, as the company adjusted its manufacturing scale and commitments to reflect the evolving, more seasonal market for COVID-19 vaccines.
How is Moderna managing the decline in COVID-19 vaccine revenue and what is its strategy for future growth?
Moderna's strategy involves transitioning from pandemic-level COVID-19 vaccine sales to an endemic, seasonal market. While COVID-19 vaccine revenue has declined, the company is significantly increasing investment in its diverse pipeline. This includes advancing its RSV vaccine candidate (mRNA-1345), developing combination vaccines (like flu and COVID-19), progressing its personalized cancer vaccine (mRNA-4157 in partnership with Merck), and its CMV vaccine candidate. The increase in R&D spending reflects this commitment to diversifying its product portfolio and driving future growth beyond its initial COVID-19 vaccine success.
What is the status of Moderna's investments and liquidity position?
As of September 30, 2023, Moderna maintained a strong liquidity position with $2.93 billion in cash and cash equivalents and $4.64 billion in current marketable securities. The company's total investments (current and non-current) amounted to $9.91 billion. Despite a decrease from the prior year, these financial assets provide ample resources to fund ongoing operations, research and development, and strategic initiatives.
Are there any significant new product developments or regulatory milestones mentioned in this filing?
Yes, Moderna received FDA approval for its updated COVID-19 vaccine targeting the Omicron XBB.1.5 sublineage (mRNA-1273.815) for individuals aged 12 and older, with Emergency Use Authorization for younger children. The company also announced positive interim results for its combination vaccine against influenza and COVID-19 (mRNA-1083), with Phase 3 trials underway. Furthermore, their RSV vaccine candidate (mRNA-1345) has met primary efficacy endpoints in a pivotal trial, and a Biologics License Application has been filed with the FDA. The personalized cancer vaccine (mRNA-4157) with Merck is advancing into Phase 3 trials for melanoma and is preparing for a Phase 3 trial in non-small cell lung cancer.
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