Moderna's Sales Drop Surprises Wall Street
Monday, Jan 13, 2025 9:25 am ET
1min read Moderna, the biotechnology company behind the successful COVID-19 vaccine, has surprised investors by predicting a steeper-than-expected sales drop in 2025. The company's shares tumbled in early trading on Monday, January 13, 2025, after it announced that it expects 2025 revenue to range between $1.5 billion and $2.5 billion, down from its previous guidance of $2.5 billion to $3.5 billion issued in September 2024.
Analysts had expected, on average, $2.92 billion in revenue for 2025, according to FactSet. The company's revised guidance indicates a more significant decline in sales than previously anticipated. This unexpected news sent Moderna's stock price down by 17%, or $7.35, to $34.90 in premarket trading.
Moderna's CFO, Jamey Mock, attributed the revised guidance to several factors, including increased competition in the Covid market, falling vaccination rates, timing around manufacturing contracts with a handful of countries, and uncertainty around what advisors to the Centers for Disease Control and Prevention will recommend for RSV revaccination.
Moderna's primary revenue source has been its COVID-19 vaccine, Spikevax, which brought in more than $3 billion in sales in 2024. However, the company is facing increased competition in the Covid market, with Sanofi co-commercializing Novavax's Covid vaccine worldwide. Additionally, vaccination rates have been falling, with a 7% overall decrease in the U.S. retail market in the fall of 2024 compared to the same time in 2023.
Moderna is also speeding up and expanding a cost-cutting plan, expecting to cut cash costs by $1 billion in 2025, with additional cuts planned for 2026. The company is taking steps to preserve its cash and invest in diversifying its portfolio, with plans to launch multiple new products through 2025, including its RSV vaccine and a combination shot targeting Covid and the flu.
Moderna's announcement comes ahead of its presentation at the annual J.P. Morgan Healthcare Conference in San Francisco, where the company will detail its fourth-quarter results on February 14, 2025. Investors will be closely watching the company's progress and its ability to execute on its plans to return to sales growth in 2025 and break even in 2026.
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