Moderna's Stock Plunge: A Deep Dive into the Biotech Giant's Struggles

Moderna, Inc. (MRNA) shares took a significant tumble last week, with the stock plunging as much as 20% in premarket trading on Monday, January 20, 2025. The biotech giant's stock price decline can be attributed to a combination of factors, including lowered sales guidance, increased competition, and lower vaccination rates. This article will delve into the specific factors that contributed to Moderna's stock price drop and analyze the implications for the company's long-term growth prospects.



Lowered Sales Guidance for 2025

Moderna revised its sales guidance for 2025, expecting revenue to range between $1.5 billion and $2.5 billion. This revision is a substantial decrease from the previous guidance of $2.5 billion to $3.5 billion and analysts' expectations of $2.92 billion (FactSet). The company attributed this revision to several factors, including a shift in business strategy, increased competition, and lower vaccination rates.



Shift in Business Strategy

As the COVID-19 pandemic has become more manageable, Moderna is shifting its focus towards treating the virus as an endemic illness rather than a novel and spreading pandemic. This strategic shift may lead to lower sales in the future, as the company's primary revenue source, the COVID-19 vaccine, may not be as in demand as it once was.

Increased Competition

Moderna faces increased competition in the COVID-19 vaccine market, with other companies like Pfizer and BioNTech, Novavax, and others offering rival vaccines. This competition may lead to lower market share and sales for Moderna. In fact, the company saw a sharp decline in its COVID market share in the US retail market, dropping from 48% to 40% in 2024.



Lower Vaccination Rates

Moderna expects lower vaccination rates to weigh on its sales in 2025, as vaccination rates were down about 7.0% in the US retail market last year. This trend may continue, further impacting the company's sales. Lower vaccination rates mean fewer people are getting vaccinated, leading to reduced demand for vaccines, including Moderna's COVID and RSV vaccines.

Uncertainty in Manufacturing and Regulatory Approvals

The company cited uncertainty related to manufacturing contracts and Centers for Disease Control and Prevention (CDC) recommendations for its RSV revaccination as potential factors that could weigh on revenue in 2025. These uncertainties may contribute to the company's revised sales guidance and stock price decline.



In conclusion, Moderna's stock price drop last week can be attributed to a combination of factors, including lowered sales guidance, increased competition, and lower vaccination rates. The company's revised sales guidance for 2025 significantly impacts its long-term growth prospects, with most analysts not expecting the company to turn profitable again until 2029 at the earliest. As the company navigates the challenges of increased competition and lower vaccination rates, investors will be closely watching its progress and financial performance.