Earnings call transcript: Moderna sees Q2 2025 revenue drop, stock surges

Moderna Inc. (MRNA) reported a significant decline in its Q2 2025 revenues, which dropped to $0.1 billion, reflecting a 38% decrease in product sales compared to the same quarter last year. Despite this downturn, the company’s stock surged by 10.24% to reach $24.7, driven by positive developments in its vaccine pipeline and strategic cost reductions.

Key Takeaways

• Moderna’s Q2 2025 revenue fell sharply to $0.1 billion.
• The stock price increased by 10.24% following the earnings call.
• FDA approvals for new vaccines and cost reductions were highlighted.
• Projected 2025 revenue range was updated to $1.5 to $2.2 billion.
• Workforce reduction and operational efficiency were emphasized.

Company Performance

Moderna experienced a challenging quarter with a substantial decline in product sales, primarily due to reduced demand for COVID vaccines. The U.S. market accounted for 80% of the sales. Despite the revenue drop, the company maintained a robust cash position of $7.5 billion. Moderna’s strategic focus on cost reductions and new product approvals helped mitigate some of the financial pressures.

Financial Highlights

• Revenue: $0.1 billion (down 38% year-over-year)
• Net loss: $0.8 billion
• Cash and investments: $7.5 billion
• Net product sales: $114 million

Market Reaction

Moderna’s stock surged by 10.24% to $24.7 in the wake of the earnings call. The positive stock movement was influenced by the announcement of FDA approvals for new vaccines and significant cost-cutting measures. The stock’s performance is notable given its proximity to the 52-week low of $23.15.

Outlook & Guidance

Moderna updated its 2025 projected revenue range to between $1.5 and $2.2 billion. The company is targeting a cash cost reduction to $4.2 billion by 2027 and aims for cash break-even in 2028. Moderna anticipates potential approvals for up to 10 products by 2028, with a target market exceeding $30 billion.

Executive Commentary

CEO Stéphane Bancel emphasized the company’s commitment to streamlining operations, stating, "We remain confident in our ability to further streamline our operation structure for the remaining of 2025 to 2027." CFO Jamey Mock highlighted the balance between completing the respiratory portfolio and investing in diversification, saying, "We believe we are balancing both the need to complete the respiratory portfolio, invest in our late-stage pipeline, and invest in diversification in the company."

Risks and Challenges

• Competitive pressures in the COVID vaccine market could impact future sales.
• Seasonal fluctuations in the respiratory vaccine market pose challenges.
• Execution risks associated with cost reduction and strategic initiatives.
• Regulatory hurdles for new product approvals.
• Potential market saturation in key product areas.

Q&A

During the earnings call, analysts inquired about the secondary endpoints of the CMV vaccine and the potential of Individualized Neoantigen Therapy. There were also discussions about the pricing strategy for COVID vaccines and the implementation of AI technologies across the company.

Full transcript - Moderna Inc (MRNA) Q2 2025:

Kevin, Conference Call Operator: Good day and thank you for standing by. Welcome to Moderna second quarter 2025 conference call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there’ll be a question and answer session. To ask a question during the session, you’ll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised today’s conference is being recorded. I would like to hand the conference over to your speaker today, Lavina Talukdar, Head of IR. Please go ahead.

Lavina Talukdar, Head of Investor Relations, Moderna: Thank you, Kevin. Good morning and good afternoon everyone. Thank you for joining today’s call to discuss Moderna second quarter 2025 financial results and business updates. You can access the press release issued this morning as well as the slides that we’ll be reviewing by going to the investors section of our website. On today’s call are Stéphane Bancel, our Chief Executive Officer, Stephen Hoge, our President, and Jamey Mock, our Chief Financial Officer. Before we begin, please note that this conference call will include forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see slide 2 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward looking statements. With that, I’ll now turn it over to Stéphane.

Stéphane Bancel, Chief Executive Officer, Moderna: Thank you, Lavina. Good morning or good afternoon everyone. Thank you for joining us today. I will start with a quick review of Q2. Jamey will present our financial results and outlook. Stephen will review our clinical programs, and then I will come back and share key priorities and catalysts. Before we take your questions, let me start with a review of our financials. In the second quarter, our revenues of $0.1 billion and the loss of $0.8 billion were in line with our expectations, and they reflect the highly seasonal nature of our respiratory vaccine business. We ended the quarter with $7.5 billion.

Unnamed Speaker: In cash and investments.

Stéphane Bancel, Chief Executive Officer, Moderna: We remain highly focused on financial discipline. I’m very pleased to announce that continued cost reduction efforts across the company in the second quarter of 2025 led to a 35% reduction of cost of sales, R&D, and SG&A combined compared to the second quarter of 2024. As you know, we are very focused on cash cost and I’m happy to report that on a cash cost basis we reduced operating expenses by $581 million in Q2 2025 versus Q2 2024, which is a 40% reduction year over year. During the quarter, we made solid progress across our three strategic priorities. Priority one, driving use of our commercial products, we made strong progress in securing three approvals from the U.S. FDA.

On May 31, we were very pleased to announce the FDA approval of mNexSpike, our next generation COVID vaccine that has shown even higher efficacy than our power running Spikevax vaccine. In mid-June, we received FDA approval of our mResvia vaccine for high risk individuals aged 18 to 59. As a reminder, we are also approved for adults 60 and older in the U.S. and in 38 other countries. In July, the FDA granted full approval of Spikevax COVID vaccine for high risk children aged 6 months through 11 years. This vaccine had previously been used under EUA. This approval supports our broader goal of driving use of our commercial products and driving the company back into sales growth.

On our second priority, advancing our pipeline to drive sales growth, we are very happy to announce positive and strong Phase 3 efficacy data for flu, which we believe will advance both our flu program and our flu COVID combination program. Stephen will discuss these results shortly. Our third priority is executing with financial discipline. The second quarter 2025 marked the fourth consecutive quarter we have reduced combined R&D and SG&A expenses by double digit year over year. Additionally, in the second quarter we expanded our cost reduction plan well beyond what we announced in the first quarter. We estimate that these measures will take an additional $400 million out of 2025 cost structure we previously laid out.

This cost reduction includes a very difficult decision that we announced yesterday to reduce headcount by around 10% to better align Moderna cost structure and capabilities with current business conditions while also sustaining investments in our mRNA pipeline. This decision was obviously not made lightly. It impacts people who have dedicated themselves to our mission, teammates and friends who have built Moderna. I want to express on behalf of the entire Executive Committee our deepest thanks to all of those affected for what they have contributed to the company. These colleagues will always be part of the Moderna story. Finally, before I hand to Jamey, you may have seen that in the last couple of hours the UK Court of Appeal issued its decision. The Court has decided to uphold the High Court’s finding that Moderna’s EP949 patent is valid and infringed by Pfizer and BioNTech.

Moderna will continue to pursue and enforce its patent rights globally to protect its innovative mRNA technology. Jamey.

Jamey Mock, Chief Financial Officer, Moderna: Thanks Stéphane and hello everyone. Today I’ll cover our second quarter financial results, our updated 2025 full year outlook, and share our strategy to achieve our 2027 operating cost targets. Let’s begin with our second quarter financial results on Slide 7. Net product sales were $114 million, primarily driven by COVID vaccine sales. The U.S. accounted for approximately 80% of sales this quarter, with the remainder from international markets. While product sales declined 38% compared to the second quarter of 2024, sales were slightly above our expectations due to a stronger than expected U.S. spring booster season. We also recorded $28 million in other revenue, bringing total revenue for the quarter to $142 million. The year over year decline in other revenue was primarily driven by a $30 million upfront licensing payment that was recognized in the second quarter of last year.

Cost of sales for the quarter was $119 million, which was relatively flat compared to $115 million last year. It represented 105% of net product sales this quarter, up from 62% in the prior year, driven primarily by lower volume. R&D expenses were $700 million in the second quarter, down 43% from last year. The decline was primarily driven by the wind down of our respiratory trials and lower clinical manufacturing costs. We also had year over year reductions in preclinical and external service costs, reflecting ongoing portfolio prioritization and productivity efforts. Last year’s results also included an expense for a priority review voucher. SG&A expenses were $230 million for the quarter, down 14% year over year. The decrease reflects broad based cost reductions across external services, personnel, and commercial activities as we continue to streamline operations and manage expenses with discipline.

Our income tax provision for the quarter was immaterial, consistent with the prior year. We continue to maintain a global valuation allowance against the majority of our deferred tax assets, which limits our ability to recognize tax benefits for the quarter. Net loss for the quarter was $825 million, a $454 million improvement compared to a $1.3 billion loss in the second quarter of 2024. Loss per share was $2.13, an improvement from a loss of $3.33 in 2024. We ended Q2 with cash and investments of $7.5 billion, down from $8.4 billion at the end of Q1. The decrease was primarily driven by the operating loss for the quarter. Moving to Slide 8, I will share our updated 2025 financial framework for total revenue. We are updating our 2025 projected revenue range to $1.5 to $2.2 billion, reflecting a $300 million reduction at the high end.

This change is primarily due to a timing shift of UK COVID shipments from the second half of 2025 into the first quarter of 2026. The timing shift for the UK shipments is due to the Government’s use of their fiscal year minimum purchase product purchase for the spring campaign in 2026, so our deliveries will now deliver in Q1 2026. This represents the vast majority of the $300 million impact. Importantly, the timing shift does not impact the total value of our long-term multi-year contract with the UK Government. Our updated revenue range continues to reflect the uncertainties in vaccination rates, the competitive market environment, the size of the RSV market, and timing of licensure of our factories and product approvals in Australia and Canada. On a geographic basis, we are updating U.S. product sales. We are expecting U.S.

product sales of $1.0 to $1.5 billion, international product sales of $0.4 to $0.6 billion, and other revenues of approximately $100 million where the majority is international. For U.S. product sales of $1.0 to $1.5 billion, the high end of the range assumes flat year-over-year performance after adjusting for last year’s $200 million prior period return reserve reversal. The low end of the range factors the potential combined impacts from lower vaccination rates and competitive market. For international product sales of $0.4 to $0.6 billion, the low end of the range is mainly from secured contracts, while the high end factors in incremental revenue from active tenders. The range now also reflects the shift in shipments for the UK from the second half of 2025 to the first quarter of 2026.

For other revenues of $100 million, we’ve already recognized $50 million in the first half of the year and expect a similar amount in the second half. The majority of the revenue is associated with our new manufacturing sites but also includes some grant, collaboration, licensing, and royalty revenue. The split of our Q3 and Q4 revenue mix will be dependent on timing of regulatory approvals across the world and the number of days available to ship. In the third quarter, we expect a revenue split of 40% to 50% in Q3 with the balance in Q4. Our cost of sales estimate of $1.2 billion remains unchanged and reflects year-over-year improvements in manufacturing efficiency, offset by increased costs associated with the go-live of our new international manufacturing sites. Newly introduced tariffs are not expected to have a material impact on our cost of sales.

We continue to monitor changes to global tariffs. We are lowering our R&D expense forecast from $4.1 billion to a range of $3.6 to $3.8 billion due to Phase 3 trial wind-downs, continued portfolio prioritization, and productivity. Our revised R&D guidance projects an increase in the second half versus the first half, driven by the seasonality of vaccine spend as well as studies in support of regulatory approvals. SG&A expenses are still expected to be $1.1 billion. Similar to last year, we expect higher SG&A expenses in the second half of the year, primarily due to commercial-related activity but also due to severance charges associated with the workforce reduction we announced yesterday. We expect taxes to be negligible in 2025. Our capital expenditures projection has been lowered from $400 million down to $300 million due to our continued prioritization and efficiency gains.

We still expect in 2025 to have approximately $6 billion in cash and investments.

Unnamed Speaker: Moving.

Jamey Mock, Chief Financial Officer, Moderna: To Slide 9 as discussed on last quarter’s call, we are planning a total reduction in annual GAAP operating expenses of over $6 billion from $11 billion in 2023 to $5 billion or less in 2027 on a cash cost basis, which excludes stock-based compensation, depreciation, and amortization. We are decreasing annual operating expenses from $8.9 billion in 2023 to our midpoint target of $4.2 billion in 2027, which is a reduction of over 50%. Our revised 2025 GAAP operating expense range is now $5.9 to $6.1 billion, a $400 million reduction at the midpoint from our previous guidance of $6.4 billion. This updated guidance puts us on track to achieve the first $5 billion of our overall $6 billion reduction in annual GAAP expenses in two years. Our updated 2025 guidance includes $0.9 billion of non-cash expenses from stock-based compensation, depreciation, and amortization.

Excluding those non-cash items, we now project a 2025 cash cost of approximately $5.1 billion at the midpoint of the range, a $400 million reduction from our previous cash cost estimate of $5.5 billion. The strong progress in cost reductions to date has been a company-wide effort while we continue to drive additional cost reductions in all areas. The largest source of future reductions will come from R&D, which represents over 60% of our cost base. On the next slide, I want to share our strategy to achieve our 2027 operating expense targets in more detail. On Slide 10 you can see our GAAP and cash cost targets for 2025 versus 2027.

At the midpoint of our ranges, we are targeting a $1.1 billion GAAP cost reduction from $6 billion in 2025 to $4.9 billion in 2027 and a $900 million cash cost reduction from $5.1 billion in 2025 to $4.2 billion in 2027. There are four primary drivers to achieve this goal, which are all relatively evenly split in impact. First, a reduction in R&D expenses from the completion of our large Phase 3 trials. We are already seeing the impact of the completion of most of our respiratory trials in 2025 and we’ll start to see future cost savings by 2027 from the completion of our Phase 3 trials for CMV and norovirus. This includes both direct trial costs as well as reductions in clinical manufacturing and other related overhead. These cost reductions will be partially offset by select investments in the pipeline, such as our oncology portfolio.

Second, we will continue to drive manufacturing efficiencies, which will impact both cost of sales and R&D. We have already made strong progress over the past few years to optimize our manufacturing footprint from endemic level demand of our COVID vaccine. We expect to drive additional savings through process improvements as well as reductions in future inventory write-downs. For example, in 2024 we had $0.5 billion of inventory write-downs which we are actively driving to reduce in 2025 and beyond. Third, we continue to drive procurement savings. Some of the savings from the renegotiated contracts already taken place will not be fully realized until 2026. Additionally, we have a strong pipeline of new savings initiatives.

Fourth, we announced a workforce restructuring yesterday that impacts approximately 10% of our employees and will lower our employee base to under 5,000 by the end of the year versus 5,800 at the beginning of the year. Headcount reductions are always difficult decisions as they impact valued colleagues who have contributed meaningfully to our mission. However, these actions are necessary to reshape our capabilities and align to our long-term operating cost structure. In summary, in just two years the team has made tremendous progress towards our four-year, roughly $5 billion cash cost reduction plan by the end of 2025. We have taken nearly $4 billion of cost out of the business and have an achievable plan to remove another $1 billion over the next two years. We remain committed to breaking even on a cash cost basis in 2028 and will adjust spending as necessary.

With that, I will now turn the call over to Stephen.

Unnamed Speaker: Thank you Jamey and good morning or good afternoon everyone. Today I’ll review progress across our pipeline. Slide 12 is a review of our prioritized pipeline. As Stéphane stated earlier, we have announced significant updates for many of these programs, including the recent approval for mNexSpike, an expanded label for mResvia, and approval of our pediatric Spikevax COVID vaccine, which was previously available in the U.S. under an emergency use authorization. In the quarter, we also reported strong vaccine efficacy results from our Phase 3 seasonal flu trial, and we continue to make progress in the rest of the prioritized portfolio where we are targeting a total of eight additional potential filings through 2028. Moving to Slide 13, which outlines the latest developments of our late-stage respiratory portfolio, I’ll start with our COVID vaccines, Spikevax and mNexSpike.

As mentioned earlier, we are very pleased with the FDA’s approval of mNexSpike, our next-generation COVID vaccine, which has shown strong relative vaccine efficacy compared to Spikevax in its Phase 3 trial, including in the 65 and older age subgroup and in those with risk factors for severe COVID-19. mNexSpike was approved in the U.S. for individuals 65 and older and for people 12 to 64 with at least one risk factor. An extensive analysis of the Phase 3 clinical data for mNexSpike was published last month in The Lancet and the link to the publication can be found on this slide. We submitted the annual updates for our COVID-19 vaccines for the currently recommended LP 8.1 strain in the quarter and expect mNexSpike and Spikevax will be available this fall in the U.S.

Speaking of Spikevax, the vaccine was recently approved by the FDA for high-risk children ages 6 months to 11 years. Spikevax had previously been available to this age group in the U.S. only under an emergency use authorization. Earlier this week, Spikevax also received EMA approval for the current season update LP 8.1 strain update for the coming season. For RSV, our mResvia vaccine was approved by the FDA on June 12th for individuals ages 18 to 59 with at least one risk factor. The CDC subsequently adopted the ACIP recommendation for the 50 to 59 year old age cohort in this group, which means that recommendations for our vaccine are now consistent with competitors. For our seasonal flu vaccine, we announced positive results from our Phase 3 efficacy study. We are very pleased with the results, which I’ll talk through on the next slide.

We expect these flu results will also support our discussions with regulators about our flu COVID combination vaccine, and we have begun consultations with regulators on the submission requirements for both vaccines. On slide 14, I will discuss the very encouraging P304 flu vaccine efficacy data released during the quarter. In this 40,000 person study conducted across 11 countries, our seasonal flu vaccine mRNA-1010 demonstrated relative vaccine efficacy that was 26.6% higher than the licensed standard dose comparator in adults age 50 and above. Safety and tolerability of mRNA-1010 were consistent with previously reported Phase 3 results, and the majority of solicited adverse reactions were mild. Importantly, strong relative vaccine efficacy was observed for all three influenza strains contained in the vaccine, including H1N1, H3N2, and the B. Victoria strain. Likewise, the relative vaccine efficacy was consistently strong across age groups, risk factors, and previous vaccination status.

In the important 65 and older demographic, relative vaccine efficacy was a strong 27.4%. We look forward to presenting these data at an upcoming medical conference, and we are preparing to file for U.S. FDA approval for this vaccine. Now turning to our non-respiratory vaccine and rare disease portfolios, in our Phase 3 CMV efficacy study for mRNA-1647, we have now accrued sufficient primary endpoint cases for the final analysis. The analysis has not yet been conducted, and the company remains fully blinded at this time. We’ve submitted an amendment to the analysis plan to add important powered secondary endpoints that we hope will increase the scientific value of the results. Once the updated analysis plan is formalized, we will proceed with the analysis of primary and secondary endpoints, which we expect to complete in the fall. Our Phase 3 norovirus study is now accruing cases in its first season.

As with other studies, the interim analysis of efficacy is dependent on case accrual, and depending upon the rate of case accrual, the study has been designed so that it may proceed to a second season of enrollment if necessary. In rare diseases, our propionic acidemia, or PA, program is currently in a registrational study, and we believe we are on track for a potential 2027 approval. For methylmalonic acidemia, or MMA, we plan to initiate the registrational trial this year. We continue to advance our oncology portfolio with significant progress across our Individualized Neoantigen Therapy known as Intismeran, mRNA-4157, previously called checkpoint, and our early stage oncology pipeline. In collaboration with Merck, we have several late-stage studies underway for Intismeran. As a reminder, the Phase 3 trial in adjuvant melanoma is fully enrolled and accruing cases towards its interim analysis.

Our Phase 2 adjuvant renal cell carcinoma trial is fully enrolled as well, and as we have disclosed previously, we have two Phase 3 studies in non-small cell lung cancer, one Phase 2 study in high-risk muscle invasive bladder cancer, and one Phase 2 study in high-risk non-muscle invasive bladder cancer. We have also expanded our Intismeran program into a Phase 2 study in first-line metastatic melanoma. This could be the first of many studies using Intismeran and Keytruda together in metastatic indications. Following on from Intismeran, mRNA-4359 is now in a Phase 2 study in first-line metastatic melanoma and first-line metastatic non-small cell lung cancer, and we are currently enrolling patients in the lung cancer portion of that study. We are pleased that the data from the Phase 1b study of mRNA-4359/Keytruda in checkpoint inhibitor refractory PD-1 positive patients was accepted as a mini oral presentation at ESMO.

We look forward to presenting these findings at the meeting in October. In early stage oncology, we are also dosing patients in our Phase 1 tumor targeted antigen therapy, mRNA-4106, and the INDs for our cell therapy enhancing antigen therapy, mRNA-4203, and our T cell engager, mRNA-2808, are also now both open. We are pleased by our growing oncology pipeline and the continued strong momentum of the large Intismeran clinical trial program in partnership with Merck. With that, I’ll hand over to Stéphane.

Stéphane Bancel, Chief Executive Officer, Moderna: Thank you, Stephen and Jamey. As you know, we have three priorities. Priority one, drive sales of approved product. Priority two, focus on a late-stage pipeline where we can drive product growth for approvals, and priority three, delivering on our cost efficiency across the company. Our first priority is to drive use of mNexSpike, Spikevax, and mResvia vaccines. We entered the third quarter of 2025 with pre-approved products in the U.S., and we are seeing a growing number of approvals in countries worldwide. For priority two, we are focused on delivering up to 10 products approval, which we believe will drive sales growth for the company. Together, these 10 anticipated products target an addressable market that is over $30 billion. In Q2, we secured U.S. approvals for mNexSpike and mResvia for high-risk people, and we share exciting data in flu enabling flu and flu COVID Combo.

On the cost side of the house, we’ve demonstrated our commitment to cost discipline through the reduction achieved last year in 2024 and also in 2025 to date. We remain confident in our ability to further streamline our operation structure for the remaining of 2025 to 2027. Jamey just took you through our plans to cut an additional $400 million off our 2025 cost structure, and we are not done. We have many new projects in the works to reduce costs further. These cost reduction activities we have in place give us even greater confidence in our plan to reduce our cash cost to $4.2 billion in 2027. These actions are very important to help us achieve our cash break-even target in 2028. As we make these cost improvements, we are seeing continued use of AI across Moderna.

We rolled out GPT Enterprise in 2024 and established widespread GPT literacy across the entire organization. Today, 100% of our knowledge workers are active daily users of ChatGPT. As you can see on slide 22, GPT use has grown very fast at the company, and in 2025 we enhanced our AI tools to allow for deep research capabilities, allowing for the creation of comprehensive reports without compromised quality of output. An example of a deep research application is the creation of target product profiles. This AI-based activity greatly reduces the amount of time it takes on product planners to create marketing strategies. We’re excited about how AI has already improved our business, and given the doubling of AI capabilities every six to seven months, we’re working hard to continue to reinvent our company across each business process, department, and team.

We’re excited about the coming months and quarters as we have a lot of important catalysts. First, of course, the potential approvals of Seasonal Flu and the Flu COVID Combo programs based on the data Stephen shared with you. We’re so eager to get the CMV Phase 3 efficacy data later this year. Norovirus Phase 3 readout is, of course, subject to case accruals. In Oncology, we look forward to the readout of our ongoing Individualized Neoantigen Therapy (INT) Phase 2 five-year durability data in adjuvant melanoma. We look forward to a Phase 3 adjuvant melanoma trial readout for Intismeran. As Stephen said, in Oncology, we are looking forward to sharing the checkpoint Phase 1b data at ESMO in Berlin in October, and at a later date we look forward to sharing the Phase 2 data of this program.

PA is already in research and study, and MMA will be very soon. I’m pleased with the progress we have made on all three of our priorities over the course of the first six months of the year. We now have three products approved by the U.S. FDA. We are highly encouraged by the progress in the pipeline and very pleased by flow and on financial discipline. We have accelerated our plan for cost efficiency and expect to deliver an additional $400 million of cost saving this year. I want to thank the team for all the great work that was done this quarter. We are very focused on executing those priorities going forward. This work allows us to be focused on our mission to deliver the greatest possible impact to people for mRNA medicine. With this, operator, we’ll be happy to take questions.

Kevin, Conference Call Operator: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered or wish to move yourself from the queue, please press star 11 again. We’ll pause for a moment while we compile our Q&A roster. Our first question comes from Salveen Richter with Goldman Sachs.

Unnamed Speaker: Line is open.

Lavina Talukdar, Head of Investor Relations, Moderna: Good morning. Thanks for taking my question. I was wondering if you could put the changes to CMV in context for us and just help us understand the rationale behind the addition of these secondary endpoints. Secondly, as we look to the Individualized Neoantigen Therapy program there, and I know we’re going to see some data at ESMO, can you help us understand the cadence of data reads over maybe the.

Unnamed Speaker: Next 12 months or so as we.

Lavina Talukdar, Head of Investor Relations, Moderna: Look to some of the other programs to mature? Thank you.

Unnamed Speaker: Thank you, Salvi. First on CMV secondary endpoints, obviously we’re pleased to now have sufficient primary endpoint cases, which as you know, were based on primary prevention infection on an immunogenicity endpoint. Antibodies against antigens not in the vaccine, but there’s a lot of other data that will help inform the potential value of a CMV vaccine, including looking at things like the presence of virus in bodily fluids and or other markers or measures of infection that could be quite relevant for the use of the CMV vaccine across a wider range of populations, including even in the congenital CMV space.

Given that this is now the final analysis and as we’ve accrued a large number of cases and a lot of data, including again some of those secondary potential endpoints, we wanted to make sure that we reflected those in the final analysis plan as we hope that we will see a positive primary endpoint and also get the benefit of some of those secondary powered endpoints in the totality of data that would come out of the study. I’ll just remind you again that the best approach for doing this is while we are completely blinded so the company does not know the results on the primary or any of the secondary.

We are just making sure to protect the integrity of the study that we update the statistical analysis plan and receive approvals for it prior to initiating that analysis with an unblinded team, at which point we would then become unblinded to the results after the DSMB. This is just making sure we’re protecting the integrity of the study. We think it’s a prudent decision to take a little bit of time here to update all those documents prior to conducting the analysis. Really look forward to that result in the fall. As relates to the cadence of results on Intismeran, we’re fully enrolled in the Phase 3, as we noted for the confirmatory study in melanoma, we are accruing events. We continue to hope that we will be able to have a successful interim analysis for efficacy on that study.

On the timelines we previously mentioned, we have a number of other studies that are randomized. Actually all of the Phase 3 and Phase 2 studies are randomized controlled studies. Several of those could read out similarly in the near term, including the studies in bladder cancer and particularly those that are largely enrolled, as well as renal cell carcinoma. Those are event driven. As is always the case for event driven studies, it’s hard for us to predict exactly when we’ll have sufficient data to conduct those interim analyses. I do believe that in the coming year or two, there will be a consistent cadence of results from these randomized studies that will come out, hopefully first with a successful Phase 3 adjuvant melanoma study, and really soon thereafter with some of these Phase 2s and then moving into the lung cancer space. Thank you.

Kevin, Conference Call Operator: One moment for our next question. Our next question comes from Elaine Amaro with UBS.

Unnamed Speaker: Your line is open.

Lavina Talukdar, Head of Investor Relations, Moderna: Hey guys, thanks for taking the question. Can you discuss how we should think about pricing for the COVID vaccine in the U.S. this year and what your expectations are for net price or I guess how pricing this year would compare versus last year and any takeaways from your contracting discussion so far? Thanks. Sure.

Jamey Mock, Chief Financial Officer, Moderna: Thanks, Kelly. Yeah, what I’d say is in the U.S. we’ve given a range of $1 billion to $1.5 billion. As I mentioned in my prepared remarks, we put in variability for competitive pressures, which gets into contracting and pricing, to your point, to your question, as well as vaccination rates, you know, first-time vaccination rates. If you look at the first half, as I mentioned, when we look at the spring booster, it was down roughly 10 or 11%. That makes us feel good. It’s a smaller sample size, but as we go into the second half, it’s the only barometer we have heading into the second half as it pertains to pricing and contracting. Contracting is basically complete now, so we will look to the second half, and pricing is also complete in there. We’re also looking at mNexSpike in there as well.

I would say just right now all those factors are within the range, and we have confidence within that range. I don’t really want to be specific on pricing or our share at this point, but it’s factored into our range, and we feel confident in it.

Lavina Talukdar, Head of Investor Relations, Moderna: Understood. Thanks.

Kevin, Conference Call Operator: One moment for our next question. Our next question comes from Michael Yee with Jefferies.

Unnamed Speaker: Your line is open. Hey guys, thank you. Appreciate the opportunity for two questions. One is on CMV. I just wanted to follow up for Stephen and maybe just talk to expectations about what you guys think is a positive readout both on VE, but also what is a good readout on a secondary endpoint that would help payers or patients or clinicians think about the value of CMV given this novel type of vaccine for patients. Second, obviously there have been various changes within U.S. FDA and CBER and within the ACIP. I just wanted to understand if you think that the dialogue remains very positive and how you expect things going forward. Thank you. Great. Thank you, Michael, for both.

First, on the CMV results, we powered the study and as we’ve said, believe the product will have an impact if the vaccine efficacy as the primary endpoint is better than 49.1%. That was the lower bound acceptability threshold for the primary analysis against prevention of infection. That’s because you might say, 49% or 50%. Is that a substantial benefit? If you think of all of the burden of disease associated with CMV over a lifetime, a 50% reduction in that would be a pretty profound benefit. We believe on public health and for individuals there is complexity in terms of the individual indications because prevention of infection is one thing, but there’s going to be a need to demonstrate value. Some of that will be demonstrated post approval with some of the real world evidence generation studies that always happen around vaccines.

We wanted to maximize the value created out of secondary endpoints in this study because we have such a rich study of information. Those include looking at things that you might think of as the persistence of virus in the blood or in the urine, the shedding and whether or not you were able to control that latent infection. I’ll remind you that in the EBV vaccine Phase 1 study, which we’d shared previously a year ago, we were able to show quite strong impacts on the rates of virus, the presence of virus over time in patients that were EBV positive who’d received our EBV vaccine. Different program, which was the level of control that we were excited to see in that program.

If we saw something similar here in CMV, we think that would speak to the potential benefit about the risk of congenital transmission from, let’s say, a pregnant mother who’s becoming infected to her unborn child, as well as other potential benefits related to the chronic health issues that can come from CMV. Obviously, for those, we don’t have a pre-specified hypothesis in the primary endpoint, but we would love to see efficacy as good or better than what we’re seeing in the primary of 49%. So 49% feels good for us. That’s where we designed the study and we are looking forward to it. Obviously, we hope to do better than that, but we will ultimately look to the totality of the data to understand the value of the product.

Given the burden of CMV in health systems and for individuals, we’re quite hopeful that we’ll be able to demonstrate that value quite quickly, including out of this Phase 3 study with the new secondary endpoints. As it relates to the CBER changes and some of the ACIP changes, I’ll just say that we continue to work closely with our review teams across all of our products. We are very grateful for the three approvals that happened in the last quarter. I will note that they happened on time and that was through the incredibly diligent work of the folks at the U.S. FDA to conduct those reviews in a rigorous way. We continue to feel that those productive dialogues are going on now, even on our existing files for the seasonal update.

We will always make sure that we provide prompt and fully transparent answers to the agency and work closely with them so that they can conduct that work. We’re incredibly grateful for that, as well as the CDC and ACIP, where we get questions that they need information on so that they can guide public health. We’ll make sure that we provide that information and we look forward to working with both CDC, ACIP, and the U.S. FDA and CBER to continue to advance our pipeline and our mission. Thank you.

Kevin, Conference Call Operator: One moment for our next question. Our next question comes from Tyler Van Buren with TD Cowen.

Unnamed Speaker: Your line is open. Good morning, this is Greg on for Tyler, do you have any early indications of what demand for COVID vaccines might look like this upcoming fall and winter season based on interactions with customers, or will we need to wait to see early uptake at the end of this month or early next month? Thank you. Yeah, look, I think first let’s separate the outside the U.S. versus inside the U.S. part of that question. I think that that’s probably more focused on the U.S., but outside the U.S. many of our government customers are purchasing through advanced purchase agreements. Those indications are pretty firm. You can see that in our even how we’re guiding forward. Some of those are under advanced purchase agreements, others are under tenders that have been completed and possibly published in those countries. That feels quite stable. In the U.S.

with customers, what I’d say is we saw a quite solid spring booster campaign. If you look from March 1 forward, the actual volumes in the spring booster campaign in the U.S. were only slightly down from last year. If you actually look at the 65+ population, which is the core population, we think going forward, given the new labels and framework for recommendation, it was actually down only 1 or 2% from March 1 to the end of the quarter June 30, which I think speaks to the realization that those at high risk of severe COVID-19 continue to be compliant with public health recommendations and want to protect themselves even in the spring campaign. That has been the same experience, therefore, of our customers in the retail channel and elsewhere where they have seen that evidence in the last four months.

As we look to the fall, we obviously have some uncertainty both about what the ultimate ACIP recommendation will be, as well as some of the other market uncertainties that exist. We all want to be prepared to deliver a season that could be in line with prior seasons if the trends continue from the spring till now. We are going to remain cautiously optimistic. Certainly our customers are preparing to make sure they have vaccines available if their customers and patients show up. The early signs are encouraging. We need to be careful going into the fall. We think we really won’t know until the end of the third quarter, until the end of September, as is always the case for our seasonal business, which is we’ll really get a clear picture in the first six weeks of the season as we launch.

Stéphane Bancel, Chief Executive Officer, Moderna: Thank you.

Kevin, Conference Call Operator: One moment for our next question. Our next question comes from Jeff Meacham with Citigroup. Your line is open.

Unnamed Speaker: Hi, good morning, guys. This is Jarvi on for Jeff.

Stéphane Bancel, Chief Executive Officer, Moderna: Two real quick questions.

Unnamed Speaker: You mentioned additional cost cutting area that you could target. You noted that R&D is a primary driver of costs right now. How might you balance the need to bring later stage infectious products to market and also the need to shift away from seasonality factors that current products have? Second, on CMV, these secondary endpoints, the decision to add them, did they come on the back of interactions or discussions from U.S. FDA? Some color in that would be really helpful, thank you. Sure. Yeah.

Jamey Mock, Chief Financial Officer, Moderna: Thanks, Charlie. I think the first question was on how we are balancing our late-stage pipeline. We still think we are investing quite a bit in our late-stage pipeline. $3.6 to $3.8 billion is still significant. Particularly, we are very conscious of where we are from a revenue standpoint. We’ve made this decision and really stood by it for the last two years. We laid this out in 2023 that we were going to invest in our late-stage pipeline. We continue to do that. We are actively adjusting as we go and we will continue to adjust as we go. That is why we’re taking our cash cost from $9 billion down to $4 billion. At the end of the day, you also mentioned seasonality. We think we are building a diversified portfolio that is not just seasonal. We do want to complete the respiratory portfolio.

That will be stronger when we have all the products together and give us more ability to compete. When you look at CMV, our oncology pipeline, and our rare disease pipeline, those aren’t as seasonal. We believe that we are balancing both the need to complete the respiratory portfolio, invest in our late-stage pipeline, and invest in diversification in the company. We’ve been doing that for the last two years and we’ll continue to do it, but we have had to adjust it down. We did have greater ambitions, but we will continue to adjust and have adjusted. I think that’s what we’re seeing.

Stéphane Bancel, Chief Executive Officer, Moderna: Maybe just to add to Jamey’s point, we’ve also said that we will not invest in Phase 3 studies for new latent vaccines. As you know, with EBV, HSV, and other vaccines, we also say that we might be looking for partners, either project financing or pharma partners. The rare disease, of course, is small in terms of dollars. We also said we’re going to focus on PNMA for now. We’ll advance more programs later. For now, we need to be financially disciplined. In oncology, as you know, for Intismeran, Merck is paying 50% of the cost, which is why, as Jamey explained, we have discussed this mechanical effect that is based on the strategy we decided to pursue to make sure that we drive back the company to profitability in 2018.

Unnamed Speaker: On the CMV question, just a little again, sort of overall framing on this, we remain blinded to the primary results and the secondary results that are in the study. The interim analysis that we announced much earlier in this year was only on that primary endpoint. That is the design of those studies. As we did not meet the criteria for early success in that interim analysis, we then proceed to the final and the final has much more information in it. Obviously, we leave the primary endpoint unchanged and we’ll test against that. If that is successful, there is an opportunity to pass down the alpha to powered secondary endpoints as well as a final opportunity for us to say are we getting all the information we want from the blinded analysis prior to that unblinding event.

Internally in Moderna, we identified that we’ve actually been very successful in collecting data in the course of the study across a range of different potential endpoints and we wanted to elevate some of those into that secondary endpoint analysis. In order to do that while blinded, we have to then update the statistical analysis plan. We did consult with regulators as we are doing that, and we want to make sure that is done in the utmost to a gold standard, high integrity way prior to conducting the analysis so that we can get the benefit of that additional information that is in the study. We remain blinded. This is just a diligence matter of making sure we get this updated in the right way and then we’ll look forward to proceeding forward with that analysis.

We have done that in consultation obviously with regulators, but we initiated that ourselves. Last point, I just can underscore we will still expect this in 2025. At this point, we have the data in hand. It is literally just making sure we dot our I’s and cross our T’s before conducting that analysis this fall.

Stéphane Bancel, Chief Executive Officer, Moderna: Thank you.

Kevin, Conference Call Operator: One moment for our next question. Our next question comes from Courtney Breen with Bernstein.

Unnamed Speaker: Your line is open.

Lavina Talukdar, Head of Investor Relations, Moderna: Hi Moderna, thanks so much for taking my question today. A couple of pieces that I wanted to just touch on. First, with the INT, it looks like you’ve added the first line melanoma in there. As you think about kind of patients being treated over the course of their disease, you’ve already kind of hitting them in the early stages, the adjuvant space, and now popping up with a new first line trial for the metastatic space. Could you imagine a world where patients might get kind of an INT twice in the course of their disease state if they were to progress? Or will this be a more narrow patient population in the first line, those that perhaps haven’t had it in an earlier stage?

The second question that I did want to ask was just in terms of the kind of employee headcount cost cutting that you have just announced. Can you just add some more context, and apologies if I’ve missed this, on kind of where you are focused with kind of removing some of that headcount? Are there any places that you’re adding to kind of enhance efficiencies? Just talking about kind of what the ins and outs might look like to get to that new employee headcount.

Stéphane Bancel, Chief Executive Officer, Moderna: Thank you. Great.

Unnamed Speaker: Thank you. I’ll take the INT question first. As you mentioned, we are looking at first line metastatic melanoma. We look forward to a day when melanoma patients broadly are getting INTs early in the adjuvant setting. Right now, the reality is, as we’re not yet approved and being used in that space, there’s still a substantial need in frontline metastatic. Your question was sort of, could we expect a world maybe in that distant future where we are being used in both places? I think the answer is yes. I’ll remind you, it’s an individualized treatment. It’s an individualized treatment we make on a biopsy of your tumor at the time which happens. It’s conceivable that you could get a durable benefit in the adjuvant setting and maybe very much more distantly have a metastatic event. The neoantigens in your tumor might have changed.

The actual INT you would get in that frontline setting would actually be updated for the evolution of your own personal cancer. That would be a world where you can obviously see the potential for treating early and treating late. That’s speculative in the sense that it’s far out there and we’ll have to prove those things. Certainly we could see a world where people are receiving different versions of their individualized neoantigen therapy throughout the treatment of their cancer.

Stéphane Bancel, Chief Executive Officer, Moderna: I think the second question on employees, Courtney, if you look at it, basically, there’s a few buckets, Carly. No manufacturing driven by productivity, whether it’s technology, productivity, or processes or other things we are doing in R&D, as we talked about a lot. This is part of a strategy. We are not investing in new Phase 3 study in respiratory. As those phase out, of course there is some capacity that we need to kind of resize, as you can imagine. We’re not starting new ones. We’re not starting new late Phase 3. G&A has a lot of productivity across the board. We of course continue to hire. I think if you check, I check. I think a week ago, there’s still 150 positions on Moderna’s website. Right now we are hiring as we need to grow the business to prepare the launches. This is really important. Thank you.

Kevin, Conference Call Operator: One moment for our next question. Our next question comes from Corey Kasimov with Evercore ISI. Your line is open.

Unnamed Speaker: Hi, this is Addie on for Corey. I wanted to ask a little more on the decision to start the first line metastatic melanoma trials for Intismeran. What does this suggest about what you’re learning about the product, where it might be best suited to work, and your evolving confidence in the program? Thank you for the question. Look, we continue to follow the randomized Phase 2B results from our adjuvant melanoma study. I think as we have seen in the repeated updates, and we hope to provide future updates on that, as was mentioned previously, we continue to have enthusiasm from that study. That really lays the foundation for why we are optimistic about the overall program. If you look across where we have made with our partner Merck, the most sizable investments, we have obviously been looking most substantially in the adjuvant settings.

That makes sense to us where the burden of the tumor is the lowest and where your immune system has the greatest chance of achieving a really significant response. I don’t want to lose sight of the fact that we still believe adjuvant settings are important. I’ll also note that we’ve gone for some monotherapy smaller studies that we’re starting to look at which have us looking even earlier than adjuvant in some ways. We’re quite enthusiastic about the program potential from adjuvant and earlier. That said, we also want to assess diligently whether or not there’s an operational for us to do late stage in, you know, particularly in the metastatic indication. That’s where metastatic melanoma made the most sense. It was also enabled by some progress we’ve really made on the manufacturing side. Now I’ll just make the last comment on the metastatic indication.

Those are patients that if they’re unfortunately at that stage, they tend to progress quite quickly and we need to be sure that we can deliver highly efficiently, highly reliably a product for them inside of six weeks or hopefully even better from a quick turnaround perspective so that they can start being treated by the drug post enrollment in the study. It’s quite pragmatic to say let’s build up the capability in the adjuvant and early space, but then now go in a targeted way and look in later stage. What we’ve really seen in the Individualized Neoantigen Therapy (INT) clinical portfolio over now many studies and over 1,000 patients treated is this opportunity for us to look in the late stage with a rapid turnaround, highly efficient manufacturing system.

I don’t want to lose sight of the fact that we still really believe in the adjuvant space; that is the major place that we’re vetting. We do believe that earlier than adjuvant and perhaps in the front line are worth looking at as well. We’re going to be doing that in the studies that we just announced. Got it. Just to follow up, can you discuss any regulatory interactions you have had and the path ahead for checkpoint INT? I see on slide 12 that it is now expected to be filed for approval by 2028. Thank you. Thank you for that question. For 4359, we have been engaging with regulators. Those are early stage. I won’t get into the specifics of them. I’ll remind you, we’re just now moving into Phase 2.

These are really the Phase 1 stage conversations, which would make it premature to go too much into specifics. That said, we are investing behind the program, and as we announced at the last quarter, we’re investing as though this could become one of our submissions over the next three years. As you identified, sort of by 2028. That really is a statement about our prioritization of the program and our conviction given the very early stage data and not necessarily a statement about anything we’ve done either out of Phase 2 and subsequent discussions with regulators about approval timeline. It’s our prioritization of the program that brings that forward, but we believe it is possible.

Stéphane Bancel, Chief Executive Officer, Moderna: Thank you.

Kevin, Conference Call Operator: One moment for our next question. Our next question comes from Luca Issey with RBC. Your line is open.

Unnamed Speaker: Great, thanks so much for taking my question. Maybe one, Stéphane, bigger picture, can you maybe just talk about business development here? We’ve obviously seen a lot of assets being in-licensed from China, including obviously one of your competitors that actually in-licensed the assets and even flipped it to pharma for some means of profits. Given your long-term ambition to become a key player in oncology, are you actively spending time in China? If so, are you just looking at strengthening your mRNA capabilities or are you open to other modalities? Maybe second, Stephen, can you just talk about the COVID plus flu? How should we think about the sequence of the filing here with the U.S. FDA? Is it fair for us to think that you first need to get approved for flu monotherapy and then you can file the combo, or can you possibly do both concurrently?

Any color there is much appreciated so we can think about timelines. Thanks so much.

Stéphane Bancel, Chief Executive Officer, Moderna: On the first question, as we’ve said before, we have such a productive platform on mRNA that we have an abundance of assets. Actually, what we are doing, as you heard on our cost structure, is we are deciding not to take forward to Phase 3 assets that we believe deeply into PKBV, for example, because we want to be financially disciplined. We’ve said we believe this vaccine is really important for patients. As you know, we have two programs in EBV. There’s a prophylactic program to prevent mononucleosis and potentially long-term sequelae of MS, and there’s a potential therapeutic program for people that are already sick.

We believe those programs have to move forward, which is why, as we’ve said on previous calls, we are actively talking to potential pharmaceutical partners and potential product financing partners for several assets that we cannot prosecute forward alone because they are great assets, but we need to be financially disciplined at the same time. We’ve always thought that partnering is a great way to access assets that are non-mRNA technology. A good example, of course, is our important strategic partnership with Merck, with Keytruda. We could have decided to develop our own PD-1, and we don’t think this was the right thing to do. Partnering with Merck in terms of having an approved product and the right capabilities was, so we always look at the biology. That’s what has always driven us to try to find the best way to help patients and to create the best asset.

If you need a partnership, we will do so.

Unnamed Speaker: Thanks for the question on the Flu COVID Combo vaccine. I’ll first say concurrent is certainly possible. You’re asking whether it’s theoretically possible? I think we think it is. As a practical matter, there will probably be some sequencing, and as a practical matter, in the case of the U.S. FDA, it’s likely that the flu vaccine will be sequenced first. For all the reasons that are obvious, it’s that a chance to review that efficacy data from that flu vaccine feels very important for ungating the Flu COVID Combo vaccine. The one caveat I’d put on that is there are markets where we continue to proceed with our Flu COVID Combo vaccine application, including in Europe, where we believe we’re going to be able to amend that file to include the flu efficacy data. The answer is ultimately dependent on the different regulators in different markets.

It is possible that we could proceed in parallel, but for pragmatic reasons we may proceed in sequence. That doesn’t mean that we’re delaying for one to be approved before we submit, but we are allowing substantially flu to proceed before proceeding with the Flu COVID Combo vaccine. Again, market to market, different answers. Thank you so much.

Kevin, Conference Call Operator: One moment for our next question. Our next question comes from Gina Wang with Barclays. Your line is open.

Lavina Talukdar, Head of Investor Relations, Moderna: Thank you for taking my questions. I have two, maybe just follow flu COVID comments here. Discussion here. Any latest thoughts regarding Flu COVID Combo submission requirement? This is specifically regarding the U.S. FDA. The second, regarding the CMV, how do you decide the statistical hierarchy for the secondary endpoint? Also, given the study basically already completed, is it fair to say in two months we will see the data?

Unnamed Speaker: Very specific questions. Thank you, Gina, for all of them. On the flu COVID, we are actually beginning those consultations with the U.S. FDA, and we’ll wait for us to have guidance from them on what their requirements are. From the previous review, it was clear that we needed to submit the flu COVID Combo vaccine results and confirm the correlative protection from that study that we now have. We will go back and confirm that that is necessary, as well as understand any other information the U.S. FDA would want to see in the application. When we’ve had that consultation, we’ll be able to provide more clarity. I don’t have that now. As far as CMV, in terms of the hierarchy, we have not yet disclosed what the powered secondary endpoint will be or some of the other things that we are looking at.

We will once we are obviously unblinding the study. What we’re looking to do is a hierarchical testing, as you can imagine, so that we’re passing the alpha down to that secondary, and then we’re also making sure that we characterize all the additional secondary endpoints that we think will be useful in terms of characterizing the performance of the vaccine on a number of different immunologic and virologic measures. Last question. When will we see the data? We have completed the study. We are going to be diligent and careful in dotting our I’s and crossing the T’s. We have not completed the analysis. While we have most of the data, I would say that we are completely blinded to those results. We’ll take some time to first make sure that we have all the appropriate approvals on the update to the statistical analysis plan everywhere.

Then we will initiate the analysis, and there will be some period of time for an unblinded statistical team to conduct all the correct analysis and review that with DSMB, and then we’ll be informed. We do expect that to happen this fall. I will not say whether or not we expect it to happen within the next two months because, honestly, I don’t exactly know today how much time it takes to go through those approvals and complete those analyses, but we’re quite confident that it will happen properly.

Lavina Talukdar, Head of Investor Relations, Moderna: Thank you.

Kevin, Conference Call Operator: Ladies and gentlemen, that concludes the Q and A portion of today’s conference. I’d like to turn the call back over to Stéphane for any closing remarks.

Stéphane Bancel, Chief Executive Officer, Moderna: Thank you everybody for joining us today. We really appreciate it. We look forward to speaking to you in the next days or weeks. Have a nice day and a good weekend. Thanks.

Kevin, Conference Call Operator: Ladies and gentlemen, that concludes today’s presentation. You may now disconnect and have a wonderful day.

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