Moderna, once propelled to pharmaceutical prominence by its lucrative COVID-19 vaccine sales, now grapples with a decline in demand and has to write off substantial amounts of its primary product as surplus to requirements.
The company’s financial struggles were laid bare in its third-quarter earnings report, revealing a net loss of $3.6 billion, with $3.1 billion linked to restructuring costs and tax provisions. Despite surpassing the expected revenue with $1.8 billion in quarterly sales against the anticipated $1.45 billion, Moderna’s expenses significantly affected its financial results. The firm registered a write-down of $1.3 billion for its unsellable COVID-19 vaccine inventory.
Also Read: Moderna, BioNTech Face Hurdles In Cancer Vaccine Production After COVID Success
Other substantial expenses included $500 million for the termination of contract manufacturing arrangements and $100 million in related cancellation penalties.
Looking ahead, Moderna anticipates its cost of sales for the year to be around $5 billion, factoring in about $1.6 billion in charges across the third and fourth quarters. These charges are associated with the deliberate downsizing of its production capabilities.
“Despite the immediate financial impact, we are confident that this strategic move will improve the efficiency of our manufacturing operations and establish a strong foundation for improved margins going forward.”
– Jamey Mock, Chief Financial Officer
Also Read: Pfizer Reduces Revenue Projection By $9 Billion Due To Declining COVID Sales, Prepares For Substantial Cost Reductions
Moderna isn’t the only company facing such issues. Pfizer, another mRNA vaccine manufacturer, disclosed $5.6 billion in similar charges for its third quarter. Of this, $900 million was due to surplus stocks of its vaccine Comirnaty, and $4.7 billion resulted from excess supplies of its antiviral medication Paxlovid. Pfizer’s revenues also took a blow from diminishing COVID-19 sales, dropping 42% to $13.23 billion for the quarter.
Despite these challenges, Moderna remains hopeful for annual sales, predicting that its mRNA vaccine Spikevax will bring in “at least” $6 billion, buoyed by expectations of robust performance in the commercial vaccine market.
