Moderna's Fourth-Quarter Profit Suffers Due to Decrease in Vaccine Sales and New Expenses

Moderna, the biotech company that developed the Spikevax coronavirus vaccine, announced a significant decline in profits for the fourth quarter of 2022. The company's net income dropped by 70% from the same period in 2021, driven by lower sales of the COVID-19 vaccine and a one-time payment of $400 million to the National Institute of Allergy and Infectious Diseases (NIAID) for a new agreement on future royalty sales of the vaccine. Moderna also reported an increase in research and development costs, which nearly doubled to $1.2 billion, as it seeks to strengthen its income statement beyond the COVID-19 vaccine. Despite the drop in profits, Moderna continues to make progress in its drug development pipeline. The company recently received a breakthrough therapy designation from the US Food and Drug Administration (FDA) for its potential skin cancer vaccine combination with Merck. The designation is intended to speed up the development and review of drugs that show signs of being an improvement over established treatments. Researchers are testing how Moderna's potential vaccine and Merck's immunotherapy Keytruda work in improving survival before cancer returns in patients who had advanced melanoma surgically removed. Moderna expects to begin a late-stage study of the skin cancer vaccine combination later this year. In addition to its cancer vaccine program, Moderna is also one of several drugmakers developing a potential vaccine for respiratory syncytial virus (RSV), a common respiratory illness that can be serious for infants and older adults. Company officials told analysts on Thursday that they plan to submit the vaccine for approval in the first half of this year. Despite the decline in profits, Moderna's revenue remained strong, totaling $5.08 billion for the fourth quarter of 2022, though this represents a 29% drop from the same period in 2021. The COVID-19 vaccine, which brought in more than $18 billion in sales last year, is still Moderna's main source of revenue outside of grants and collaborations. Sales of the Spikevax vaccine totaled $4.9 billion in the fourth quarter, a 73% drop from the final quarter of 2021, when the Omicron variant was spreading rapidly and more people were getting either their initial shots or their first round of boosters. Looking ahead, Moderna officials said they expect additional sales from the United States, Europe, and Japan. In the US, COVID-19 vaccines will be sold commercially for the first time later this year when the federal government stops buying the shots. Moderna told The Wall Street Journal last month that it was considering pricing the vaccine in the range of $110 to $130 per dose. However, the company leaders emphasized on Thursday that people with insurance will pay nothing out of pocket for the shots, and Moderna has a patient assistance program that will provide the shots for people without coverage or who are underinsured. Following the announcement of its financial results, shares of Moderna Inc. fell by more than 8% to $145.10 on Thursday. The stock had already fallen 12% so far this year as of Wednesday. Nonetheless, Moderna's strong revenue and ongoing drug development efforts suggest that the company is well positioned to continue making an impact in the biotech industry in the coming years.