Moderna Expects $4 Billion in Revenue from COVID-19 Vaccine as Sales Shift to Private Market
August 3, 2022
Moderna Inc, one of the leading COVID-19 vaccine manufacturers, has forecasted revenue of up to $4 billion from its vaccine as sales transition from government contracts to the private market this year. The company also expects the demand for its vaccine to continue growing in 2024, comparing it to the market for flu shots.
Moderna anticipates generating $4 billion in sales from government contracts this year, while expecting to earn between $2 and $4 billion in the private market in the United States and other countries. This forecast is slightly lower than the company’s previous estimate of $5 billion in government contract sales.
The government-backed market for COVID-19 vaccines has been shrinking, resulting in a significant decline in sales for both Moderna and its competitor, Pfizer. Both companies reported a drastic fall in vaccine sales during the second quarter.
As a response to declining sales, Moderna and Pfizer are now focusing on an autumn vaccination campaign using updated shots targeting the XBB.1.5 Omicron subvariant of the coronavirus. These updated shots will be priced significantly higher than what governments were previously charged during the pandemic.
With COVID-19 cases and hospitalizations beginning to rise again, Moderna expects demand for its vaccine to reach 50 to 100 million doses in the fall season in the United States. The company estimates this based on the size of the flu market, which is around 150 million doses annually in the U.S.
Chief Commercial Officer Arpa Garay stated that as the disease burden remains high and the company explores future combinations with respiratory syncytial virus (RSV) and flu shots, Moderna’s vaccine demand will approach 150 million doses.
Moderna and Pfizer have yet to announce the final prices for their vaccines in the private market, but they have indicated that the prices will be significantly higher than the prices charged to governments during the pandemic. In March, Moderna stated that it anticipated pricing its COVID-19 vaccine at approximately $130 in the U.S., while initially pricing it at $25-$37 per dose when it was first launched.
Moderna’s shares saw a slight increase of less than 1% in afternoon trading, although the gains were offset by earlier losses.
In the second quarter, Moderna experienced a 94% decline in COVID-19 vaccine sales, with sales amounting to $293 million. While still exceeding analysts’ average estimate of $233.6 million, this decline highlights the impact of the shrinking government contract sales. Moderna also revealed that $1 billion in anticipated vaccine sales to governments have been deferred to next year. During the quarter, the company’s research and development costs surged by 62% to $1.1 billion.
Analyst Mani Foroohar from Leerink Partners expressed concern at Moderna’s continuous cash burn, with deferred revenue and uncertain private market sales adding risk to the research and development side.
To replace declining COVID-19 vaccine sales, Moderna is focusing on other products, including its experimental flu and RSV vaccines that also utilize messenger RNA technology. Analyst Tyler Van Buren from TD Cowen highlighted the importance of Moderna’s upcoming phase 3 flu data, stating that it will be significant for the company’s future pipeline.
Moderna is currently preparing for the launch of its next commercial product, an RSV vaccine, in 2024 and has already begun manufacturing the vaccine in anticipation of approval.
Moderna reported a net loss of $3.62 per share, which was narrower than analysts’ average estimate of a $4.04 loss.
Overall, Moderna remains hopeful about the future of its COVID-19 vaccine, as well as its potential in the private market and the development of other mRNA-based vaccines.
Reporting by Leroy Leo in Bengaluru and Patrick Wingrove in New York; Editing by Shinjini Ganguli and Bill Berkrot