Moderna Forecasts COVID Sales Decline As Costs Rise, Shares Fall

Moderna Inc on Thursday forecast declining COVID-19 vaccine sales and rising costs for 2023, raising concerns the U.S. biotech company could post a loss this year, and its shares fell 7%.

Moderna forecast $6 billion in costs for the year, $1 billion more than the revenue it expects to take in from sales of the COVID shot.

The sales forecast implies a "possible EPS net loss" this year compared to the huge profit its COVID vaccines drove during its peak, Jefferies analyst Michael Yee said in a note.

However, there is a potential for positive cash flow this year if Moderna is able to get more advanced purchase agreements for its COVID shots, Yee said. Moderna expects additional sales from markets including the United States, Europe and Japan.

Moderna also reported a fourth-quarter profit that missed Wall Street expectations by a wide margin, saying the results were hurt by a newly-disclosed royalty payment to the U.S. National Institutes of Health (NIH) related to development of the COVID-19 vaccine as well as other costs.

The company will make a low-single-digit percentage royalty payment to the NIH on COVID vaccines sales going forward, it said, and expects to spend $4.5 billion on research and development this year.

The company posted a profit of $3.61 per share, well below analysts' estimates of $4.68, according to Refinitiv data.

Oppenheimer analyst Hartaj Singh also said the company could have "negative earnings" in 2023, putting the share price at risk this year and next.

Sales of the COVID vaccine, Moderna's only commercial product, were expected to fall sharply this year from $18.4 billion in 2022 as much global demand for initial shots and boosters has been met, while governments and other agencies cut purchases.

Moderna is developing mRNA vaccines for skin cancer, flu and respiratory syncytial virus (RSV) that if approved would significantly lessen its reliance on the COVID shots.

It plans to file for regulatory approval of the influenza vaccine this year, but does not expect sales for the 2023 flu season.

Moderna's fourth-quarter profit was below expectations because it paid a catch-up royalty of around $400 million to the NIH related to a long-standing patent rights dispute over the COVID-19 vaccine. The company had not previously disclosed an agreement for a payment that was set in December.

Moderna's quarterly profit also took a hit from over $950 million in write-downs and charges related to surplus inventory, cancellations and a shift to Omicron-targeting bivalent boosters in many countries.