Analyst Conference Summary

biotechnology

conference date: November 2, 2023 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2023 (third quarter, Q3 2023)

Forward-looking statements

Overview: Revenue declining after Covid-19 bolus, but lots of potential future therapies. Very negative net income.

Basic data (GAAP):

Revenue was $1.83 billion, up sequentially from $0.34 billion, and down 45% from $3.36 billion year-earlier.

Net income was negative $3.36 billion, down sequentially from negative $1.38 billion, and down from $1.04 billion year-earlier.

EPS (diluted) was negative $9.53, down sequentially from negative $3.62, and down from $2.53 year-earlier.

Guidance:

Full 2023 revenue of at least $6 billion. Full 2024 revenue $4 billion, then return to growth in 2025 and break even in 2026.

Conference Highlights:

Stephane Bancel, Moderna's CEO, said "Through this quarter, we demonstrated our ability to increase share in the U.S. market, and we now expect this year's vaccination rate to be similar to last fall. In the third quarter, we significantly resized our manufacturing infrastructure to make our COVID-19 franchise profitable for 2024 and beyond. We are preparing to launch multiple products through 2025, including our RSV vaccine. We expect to return to sales growth in 2025 and, through disciplined investment, to break even in 2026." A non-cash charge of $3.1 billion for manufacturing capacity resizing contributed to the Q3 loss. Moderna has no plans to repurchase shares before breaking even in 2026.

In Q3 2023 Moderna submitted its RSV vaccine mRNA-1345 to regulators; potential 2024 launch. In Q4 2022 the Phase 3 trial met its primary endpoint. A pediatric trial is fully enrolled.

In Q3 Spikevax market share rose to 45%. Sales for 2023 through Q3 were $3.9 billion. The U.S. fall 2023 vaccinations administered in retail pharmacies to date are tracking similarly to the 2022 fall season. Expects about $1 billion in US sales and $1.1 billion international.

Six programs are now in Phase 3. By end of 2025 expects commercial sales of Covid, Flu, RSV, and Covid/Flu combo vaccines. Then a whole bunch of approvala in 2026, including in cancer and rare diseases.

Moderna currently has 48 mRNA candidates now in development. The goal of the next phase of development is to submit multiple BLAs to the FDA.

Cash ended the quarter at $12.8 billion, down sequentially from $14.6 billion. Operating cash flow negative $3.74 billion. $487 million capital expense. $2.1 billion was used to repurchase shares of stock in the quarter.

Operating expense (GAAP) of $3.84 billon consisted of $2.24 billion for cost of sales, $1.16 billion for R&D, and $442 million for SG&A. Operating loss was $2.01 billion. $105 million interest income; $51 million other loss. Income taxes $1.67 billion.

Q&A Selective Summary:

2026 break even, sales to reach? $4 billion revenue in 2024. RSV launch, then full year in 2025. Flue and Flu+Covid in 2026. Investing about $5 billion per year. But if sales do not come to fruition, we will adjust our sales and investment.

Capacity after resizing? We will be able to do $10 billion in sales based on the capacity.

RSV v. Covid contributions in 2024? We are not breaking that out. We are super confident in the RSV product profile.

We are open to partnerships in some of our development programs. We will be disciplined in our investments in the business, depending on how we see sales timing.

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