On a Thursday conference call, Moderna executives found themselves fielding multiple questions about vaccine policy uncertainties under HHS Secretary Robert F. Kennedy Jr.
Moderna is extending its cost savings program into 2027 and targeting a cash breakeven point sometime in 2028 as the larger U.S. vaccine market faces new uncertainties under the Trump administration.Moderna aims to reduce its GAAP operating costs by 1.4 billion to $1.7 billion between 2025 and 2027, the company announced Wednesday. The Massachusetts biotech now targets $4.7 billion to $5 billion in GAAP costs in 2027, versus $7.2 billion last year.On a Thursday conference call with investors, Moderna CFO Jamey Mock outlined a roadmap for the mRNA specialist to lower its cash operating costs from about $6.3 billion in 2024 to about $5.5 billion this year, and then further to $4.7 billion and $4.2 billion in the two subsequent years.Compared with cash operating costs, GAAP costs also include stock-based compensation for executives and asset value depreciation. The new cost-cut target comes as Moderna reported first-quarter revenues of $100 million and a net loss of $1 billion. The company is maintaining its full-year revenue projection range of $1.5 billion to $2.5 billion, with only about $200 million expected in the first half of the year given the seasonal demand for its COVID and RSV vaccines. As one analyst noted during the investor call, Moderna had said it would look for top-line signals to adjust its cost-cutting program. But “nothing has changed” from a revenue perspective, Mock said, despite the new cuts unveiled Thursday.In the first quarter, sales from Moderna’s COVID vaccine Spikevax reached $84 million, which came in well below analysts’ consensus estimates of $115 million, according to Jefferies. The haul included $29 million from the U.S. Pointing to prescription data, Mock noted that Spikevax’s U.S. market share has remained stable at about 38%.“Our customers are trying to manage their working capital better, so their inventory levels are down,” Mock explained.As for the company’s newly launched RSV vaccine mRESVIA, sales were negligible at just $2 million in the first quarter. The number missed analysts’ $6 million average forecast.Although the CDC’s immunization committee is expanding its recommendation for rival RSV shots from Pfizer and GSK to include high-risk adults between the ages of 50 and 59, Moderna’s FDA application for that group likely won’t come in time for the company to negotiate contracts for the upcoming RSV season, Jefferies analyst Michael Yee wrote in a Thursday note to clients. Earlier this year, Moderna laid out a plan to slash about $1 billion in its annual cash spend this year and another $500 million in 2026. Rather than a dramatic shift in direction or escalation of planned cuts, the new GAAP target is about “extending our guidance out a year,” Mock said.The large majority of the cost reductions will come from R&D, which currently represents nearly two-thirds of Moderna’s expense base, he said. That’s because many phase 3 trials are expected to be completed or wind down by 2027. Procurement savings from renegotiating contacts and other process efficiency measures will also contribute toward the savings target, he said.One such reduction will come from Moderna’s investigational flu-COVID combo shot mRNA-1083. On Thursday, the biotech said it's deprioritizing development of the asset in individuals between 18 and 49 years of age.“It’s an uncertain environment,” Mock said. “But we need to focus on what we can control, and that is our cost base.” Potential vaccine policy shifts spell uncertainty“Uncertain” is a key theme for the entire vaccines market during President Donald Trump’s second term with Robert F. Kennedy Jr., a known vaccine skeptic, serving as the secretary of the Department of Health and Human ServicesThis week, the HHS said the FDA would require all new vaccines to undergo safety testing in placebo-controlled trials prior to licensure. It remains unclear whether this “radical departure from past practices”—as described by the HHS—would delay the process of updating seasonal COVID and flu shots.The HHS has not directly communicated the policy with Moderna, the company’s president, Stephen Hoge, M.D., said on Thursday’s call.Moderna’s vaccines for COVID and RSV, as well as experimental products for cytomegalovirus and norovirus, are all tested in placebo-controlled trials, Hoge noted. Some other pipeline programs have portions of their development that happen under such a design, he said.“It will really depend upon, ultimately, what the FDA and HHS feel is appropriate, and their guidance at a program-by-program level of what that will require,” Hoge said.“Our responsibility as a manufacturer and drug developer is to make sure that we provide the data that regulators and public health officials feel like they need so that they can stand behind our products,” he added. “We will absolutely engage constructively in making sure we understand what those needs are, and that we fulfill that.” The FDA recently delayed its decision on Novavax’s COVID-19 vaccine after a reportedly unconventional intervention from the FDA’s principal deputy commissioner, Sara Brenner, M.D., a political appointee. Industry watchers are concerned that the hiccup reflects a broader policy shift in the agency’s vaccine review practice, given RFK Jr.’s anti-vaccine stance and the ouster of Peter Marks, M.D., Ph.D., who until recently led oversight of vaccines as director of the FDA’s Center for Biologics Evaluation and Research.Moderna has a next-generation COVID vaccine, mRNA-1283, under review at the FDA, with a target decision date at the end of this month on May 31.For Moderna, its interactions with the FDA have been nothing but “business as usual,” Hoge said.“We really view it as our responsibility to provide high-quality data to all of our regulators, including the FDA, so that they can conduct their assessments,” Hoge continued. “To date, those assessments have, we believe, been constructive and positive, and we have seen no signs that there’s any question about our ability to make the existing PDUFA date.”In response to the delay to grant Novavax a full license during an April interview with CBS, RFK Jr. raised another unorthodox view that single-antigen vaccines have never worked for respiratory illnesses.Moderna believes that its clinical trials demonstrate the benefits of its products, including those that are single antigen, Hoge said. Some of Moderna’s projects are multi-antigen in nature, such as its CMV candidate, he noted.“We do believe that sometimes single-antigen makes sense and sometimes multiple-antigen makes sense, and we do both,” he said.In the case of mRNA-1283, Mock highlighted that the FDA’s review is based on an 11,000-person multiyear randomized efficacy study.“We remain confident that those reviews will be consistent with prior practice,” Hoge said.
