Moderna (NASDAQ:MRNA) has revised its 2024 sales forecast downward, signaling a challenging year ahead for the biotech company. The revised outlook, which cuts expected revenue by up to 25% or $1 billion, is primarily driven by anticipated low sales of its COVID-19 and respiratory syncytial virus vaccines in the European Union. This announcement led to a nearly 14% drop in Moderna’s stock price in pre-market trading, reflecting investor concerns about the company’s future growth prospects.
Reduced Sales Expectations and Financial Impact
Moderna had previously projected approximately $4 billion in revenue for 2024, which was already the lowest annual revenue estimate since the launch of its COVID-19 vaccine in late 2020. However, the company now expects to generate between $3 billion and $3.5 billion in sales for the year, following discussions with EU officials over vaccine contracts for the bloc. The anticipated decline in sales is a significant blow to Moderna’s financial performance, especially as it faces increasing competition and a shifting market landscape.
In the second quarter of 2024, Moderna reported a net loss of $1.3 billion, or $3.33 per share, slightly better than analysts’ expectations of a $3.39 per share loss, according to LSEG data. Total revenue for the quarter was $241 million, down from $344 million a year ago, underscoring the financial challenges the company is grappling with as demand for its flagship COVID-19 vaccine wanes.
Challenges in the European Market
One of the critical factors contributing to Moderna’s lowered sales forecast is the lack of a joint purchasing agreement with the European Union. According to Chief Financial Officer James Mock, discussions with EU officials have not yet resulted in a finalized contract, and the company now sees a very low probability of significant sales in the region in 2024.
“Given where we are in the season combined with where we are in the budget season for many countries and their existing supplies, we feel there’s a very low probability that we’ll have very much EU sales in 2024,” Mock stated.
This situation has prompted Moderna to adjust its financial outlook, with the company warning that its gross margins will likely decline. With operating expenses expected to remain unchanged in 2024, the company’s net loss and cash burn are projected to increase, raising concerns among investors about Moderna’s financial stability.
Competitive Pressures and Future Outlook
Moderna’s reduced sales forecast is also influenced by an increasingly competitive environment for both COVID-19 and RSV vaccines in the United States. The company has been relying on revenue from its newer mRNA-based vaccines, including its RSV vaccine mRESVIA and an experimental COVID-flu combination vaccine, to offset the declining demand for its COVID-19 shot. However, the competitive landscape is proving challenging.
Analysts predict that sales of Moderna’s mRESVIA, its second approved product, will lag behind those of rival RSV vaccines from Pfizer (NYSE:PFE) and GSK. According to LSEG data, analysts expect mRESVIA to generate $370 million in sales in 2024, compared to a combined $1.2 billion for the Pfizer and GSK RSV shots.
Despite these challenges, Moderna remains hopeful about its long-term prospects. The company began shipping doses of mRESVIA in the United States last month, following recommendations from the U.S. Centers for Disease Control and Prevention that RSV shots be administered to adults aged 60 and over who did not receive a vaccine last year.
Spikevax Sales and Looking Ahead
Moderna’s flagship COVID-19 vaccine, Spikevax, continues to generate revenue, albeit at lower levels than in previous years. Sales of Spikevax reached $184 million for the quarter, down 37% from the previous year but significantly ahead of analysts’ average estimates of $66.42 million. This performance suggests that while demand for COVID-19 vaccines is declining, there is still some resilience in the market.
Looking ahead, Moderna’s management remains cautiously optimistic about a return to sales growth in 2025. However, the company’s ability to navigate the current challenges, particularly in securing EU contracts and competing in the RSV vaccine market, will be critical to its future success.
In conclusion, Moderna’s revised 2024 sales forecast reflects the company’s ongoing challenges in a rapidly evolving market. With reduced revenue expectations and increasing competition, the company faces a tough road ahead as it seeks to regain investor confidence and stabilize its financial performance.
This article provides an in-depth analysis of Moderna’s lowered 2024 sales forecast, focusing on the company’s financial outlook and the challenges it faces in the vaccine market. The focus keyword “Moderna 2024 sales forecast” has been integrated into the title, headings, and body paragraphs to optimize search engine visibility.
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