Moderna Stock Plunges as CEO Outlines Conservative 2025 Guidance at J.P. Morgan Conference

Moderna, the biotechnology company specializing in mRNA vaccines, faced a significant setback on Monday as its stock price plummeted following CEO Stéphane Bancel's presentation at the J.P. Morgan Healthcare Conference. The company's shares dropped by more than 17% premarket, reflecting investors' concerns about the company's revised revenue guidance for 2025.

Moderna's stock price took a hit after Bancel outlined a diminished guidance for 2025, stressing savings as key to its goal of balancing cash flow by 2028. The company's stock was down 21% when the market opened on Monday and remained in the same range a day later. This decline in stock price is the lowest since April 2020, marking a significant reversal of fortune for the company that took center stage during the pandemic.



The company's strategy moving forward will center on driving sales from its currently marketed products, such as its Covid-19 vaccine Spikevax and its RSV vaccine mRESVIA. However, these products may not be performing as well as expected in the market, as indicated by the company's revised revenue guidance. Moderna generated $3bn–$3.1bn in total product sales in 2024, below its $3.5bn target. Bancel said these revenues are expected to further drop to $1.5bn–$2.5bn in 2025.

Moderna's cost-cutting initiatives, including a reduction in cost of sales, research and development, and selling, general & administrative expenses, may not be enough to offset the decline in revenue. The company aims to reduce its cash operating cost by over 25% compared to 2023 and plans to reduce 2025 cash costs by $1 billion with an additional $500 million cost savings in 2026. However, these measures may not be sufficient to maintain the company's profitability in the face of declining revenue.

In an effort to maintain the longevity of profits gained during the Covid-19 pandemic, the company has enacted a sweeping program of cost savings, including cutting several clinical programmes. Reduced investment in R&D will continue into 2025, according to Bancel, who stated that the company will seek to reduce net cash use from around $4bn in 2024 to approximately $3.5bn during 2025, with the goal of attaining a net even cash flow by 2028.

Despite the challenges faced by Moderna, the company remains optimistic about its pipeline of mRNA-based medicines, including several new vaccines and cancer therapies set to advance in the coming years. However, investors may be less enthusiastic about the company's prospects, given the significant drop in its stock price and the revised revenue guidance for 2025.

In conclusion, Moderna's stock price took a significant hit following the 2025 guidance announcement, driven by factors such as diminished revenue guidance, weak demand for COVID-19 vaccines, cost-cutting initiatives, and market reaction. The company's revised revenue guidance has significant implications for its long-term financial projections, including a slower growth trajectory, potential impact on cash flow, stock price, and market perception. To maintain profitability, Moderna is implementing strategic moves such as cost savings, clinical program cuts, reduced investment in R&D, and a focus on marketed products. However, these measures may not be enough to offset the decline in revenue, and investors may be less enthusiastic about the company's prospects.