Moderna’s GAAP EPS Nears $0.00: A Strategic Turnaround or a Risky Gamble?

The biotech sector has seen its share of volatility as companies adjust to post-pandemic realities. For Moderna (NASDAQ: MRNA), the first quarter of 2025 brought a GAAP net loss of $(1.0) billion, resulting in an EPS of $(2.52). Yet, the company’s leadership remains confident in achieving a full-year GAAP EPS of $0.00. This article dissects Moderna’s financial maneuvering, its risks, and whether the path to breakeven is sustainable.

The Financial Tightrope: Cost Cuts vs. Revenue Declines

Moderna’s Q1 2025 performance was shaped by two opposing forces: a sharp drop in revenue and aggressive cost reductions. Revenue fell to $108 million, down 35% from Q1 2024, as demand for its Spikevax® (COVID-19) and mRESVIA® (RSV) vaccines waned. Meanwhile, the company slashed expenses:- R&D spending dropped 19% to $856 million, driven by deprioritizing less critical programs (e.g., flu/COVID combo vaccines for younger demographics).- SG&A expenses fell 23% to $212 million, reflecting cuts in marketing and facilities.

This discipline narrowed the net loss compared to Q1 2024, but the path to $0.00 GAAP EPS hinges on H2 2025 revenue growth, which Moderna projects to reach $1.3–$2.3 billion, nearly doubling Q1’s performance. The key question: Can this growth materialize?

The H2 Revenue Gamble: Catalysts and Hurdles

Moderna’s H2 strategy relies on three critical pillars:

1. Regulatory Approvals:
2. The next-gen Spikevax® (mRNA-1283) has a May 31 FDA decision, which could secure U.S. authorization and drive sales. A positive outcome could generate ~$500 million in annual revenue.

3. The RSV vaccine (mRNA-1345) for high-risk adults has a June 12 PDUFA date. If approved, this could add ~$300–$500 million in revenue by year-end.

4. Seasonal Demand:

5. Respiratory vaccine sales typically peak in the fourth quarter. Moderna’s RSV vaccine, already approved in markets like Australia, could see uptake in the U.S. and EU if approvals come through.

6. Oncology Pipeline Momentum:

7. Trials for its neoantigen therapy (intismeran autogene) in melanoma and lung cancer are advancing. Positive data could accelerate partnerships or pricing discussions, though revenue here is likely years away.

The Risks Lurking in the Shadows

While Moderna’s plan is ambitious, risks loom large:- Regulatory Delays: A rejection or delayed approval for mRNA-1283 or mRNA-1345 would derail H2 revenue projections.- Competitive Pressure: Pfizer’s RSV vaccine (Nuravax) and GSK’s RSVF vaccine threaten Moderna’s market share, especially if pricing becomes contentious.- Inventory and Manufacturing Costs: Q1’s 104% cost-to-sales ratio (driven by write-downs and underutilized capacity) could resurface if demand doesn’t meet expectations.

The Bottom Line: Can Moderna Hit $0.00 GAAP EPS?

The math is tight but plausible. Assuming:- H2 revenue hits $2.0 billion (midpoint of guidance),- Cost of sales drop to 50% of revenue (vs. 104% in Q1),- Operating expenses hold at ~$5.0 billion annually,
Moderna could break even by year-end. However, this requires flawless execution—no regulatory missteps, no further inventory write-downs, and no unexpected cost spikes.

Conclusion: A High-Stakes Balancing Act

Moderna’s push to achieve $0.00 GAAP EPS in 2025 is a high-risk, high-reward strategy. With $8.4 billion in cash and $6.0 billion targeted for year-end, the company has financial flexibility. Yet, its fate rests on H2’s regulatory and commercial performance. Investors should closely watch:- The May 31 FDA decision on mRNA-1283 (critical for pandemic vaccine sales).- RSV vaccine approvals in June and beyond.- Q3 revenue reports, which will signal whether the H2 surge is real.

In the end, Moderna’s $0.00 GAAP EPS goal is achievable—but it’s a tightrope walk over a chasm of uncertainty. For now, the market has priced in optimism, with shares up 18% year-to-date as of May 2025. Whether that optimism is justified will be clear by year’s end.