On Thursday, Moderna surprised investors with its earnings report after it showed a profit in third quarter which most likely no one anticipated considering Wall Street’s views. The results were attributed to aggressive cost containment strategies and better-than-expected sales of its COVID-19 vaccine. As a result, the company reported a net profit of $13 million, or three cents a share, compared to a net loss of $3.63 billion or $9.53 per share incurred in the same quarter last year.
Premarket trading in shares of Moderna before the stock market opened showed a sharp rise of approximately 9%. This positive development was as a result of greater than anticipated sales of the Company’s Covid-19 vaccine and also due to a successful introduction of its second commercially available product which is a respiratory syncytial virus (RSV) vaccine.
Moderna’s Covid-19 vaccine also benefitted from well-timed US approval that was earlier than the company had projected, thus enabling the company to commence distribution three weeks earlier than for last year’s vaccine. This also meant that the company was able to address the demand better in advance and was able to move doses to pharmacies and healthcare provision much faster than in the previous time. This was particularly due to the early launch as noted by the Chief Executive Officer, Stéphane Bancel, who pointed out that the company shipped twice the amount of Covid vaccine doses in a week’s time after launch than it did in the same month of 2023.
The company was also able to save costs efficiently with a target of USD 1.1 billion in cost savings by FY 2027; cost of sales for the period fell by 77% due to lower manufacturing sales and of unused Covid dose buckets. Research and Development costs went down by 2% due to less clinical development activities.
Moderna total revenue in the third quarter was $1.86 billion marking small increase from previous year’s $1.83 billion. A big part of the revenue was earned from sales of the Coronavirus vaccine with $1.2 billion in the U.S. and $600 million from the other countries. The recently approved in may RSV vaccine also added $10 million worth of U.S. sales which was below the estimates made by the analysts.
For the full year, Moderna held its guidance on revenue at $3 billion to $3.5 billion expecting growing revenues from enhancing its mRNA technologies. The company has 45 products in the pipeline including those vaccines for Cancer, flu and latent viruses and it is looking to promote further development within the company as a post-Covid strategy.
