Moderna Cuts Costs, Expands Pipeline Amidst Covid-19 Revenue Decline
Moderna, the biotech company known for its successful Covid-19 vaccine, is shifting gears as it faces a decline in its Covid-19 business. The company announced plans to cut expenses by $1.1 billion by 2027 and focus on expanding its product portfolio with a focus on respiratory and non-respiratory vaccines and therapies. These changes reflect a strategic pivot towards a future where the company’s revenue will be less reliant on its Covid-19 vaccine.
Key Takeaways:
- Moderna plans to cut $1.1 billion in expenses by 2027 by pausing development of some products and scrapping others.
- The company expects 10 new product approvals by 2027 across various areas including respiratory diseases, cancer, latent viruses, and rare diseases.
- Moderna is accelerating its development of new vaccines against respiratory syncytial virus (RSV) and influenza, aiming for approvals for these products this year.
- The company also plans to file for approval of a combination Covid-19/flu shot this year, along with a new and improved version of its Covid-19 vaccine.
- Moderna expects revenue to reach between $2.5 billion and $3.5 billion in 2025 and project a compounded annual growth rate of more than 25% from 2026 to 2028 as new products launch.
Expanding Beyond Covid-19: New Products and a Focus on Respiratory Diseases
Moderna’s strategic pivot is evident in its focus on expanding its product pipeline beyond Covid-19, particularly in the area of respiratory diseases. The company is making significant strides in developing vaccines against RSV and influenza, both of which are major public health concerns.
The company’s RSV vaccine, mRESVIA, which is currently approved for adults 60 and above, has shown promising results in late-stage trials for adults ages 18 to 59 who have an increased risk of severe RSV illness. With the FDA approval for this age group expected in 2025, Moderna is positioned to capture a substantial market share in the growing RSV vaccine market.
Moderna’s experimental standalone flu shot, mRNA-1010, has also delivered promising results in phase three trials, demonstrating a higher immune response compared to existing flu shots. This could lead to the approval of a potentially more effective flu vaccine in the future.
Moderna is also pursuing a combination Covid-19/flu shot, which it hopes to file for approval in the US by the end of 2024. The combination shot could be particularly attractive to patients who prefer to receive their flu and Covid-19 vaccines simultaneously.
Beyond Respiratory Diseases: A Multifaceted Pipeline
Moderna’s pipeline is not limited to respiratory diseases. The company is also developing new therapies for a variety of other conditions, including cancer, latent viruses, and rare diseases.
In the area of cancer, Moderna is collaborating with Merck to develop a personalized cancer vaccine. This vaccine is being studied in combination with Keytruda, an immunotherapy drug, and is showing promise in treating various types of cancer, including skin cancer.
Moderna is also developing a vaccine against norovirus, a highly contagious stomach bug that causes vomiting and diarrhea. With the potential for approval within the next two years, this could be a major breakthrough in preventing norovirus infections.
A Strategic Pivot Fueled by Innovation and a Strong Development Track Record
Moderna’s decision to cut costs and focus on its core product pipeline is a strategic move to ensure long-term success. The company has a strong track record of innovation and has proven its ability to develop vaccines that are both effective and safe.
Moderna’s CEO, Stephane Bancel, has emphasized the company’s commitment to "pacing ourselves" in R&D investment, while also acknowledging the need to optimize resources and focus on areas where the company has the greatest potential to make an impact.
This strategic approach is likely to result in a more streamlined and focused product pipeline, ultimately leading to a more sustainable and profitable growth path for Moderna. The company’s commitment to developing innovative vaccines and therapies for a wide range of diseases positions it as a key player in the evolving global healthcare landscape.
