Moderna Makes Surprise Profits On Covid Vaccines

(CTN News) – Despite slumping sales of the Covid vaccine, the company’s only marketable product, Moderna posted a surprise quarterly profit on Thursday.

With the world emerging from pandemics and utilising fewer protective shots and treatments, the biotech company and other Covid vaccine makers have had a rocky year.

According to LSEG, formerly known as Refinitiv, Moderna reported for the fourth quarter what Wall Street expected:

• The earnings per share were 55 cents. Compared to analysts’ expectations, that may not be comparable.

• $2.81 billion vs. $2.50 billion in revenue

For the fourth quarter, Moderna earned $217 million, or 55 cents per share. Comparatively, the company reported net income of $1.47 billion, or $3.61 per share, last year.

Covid shot revenue dropped 43% from last year’s same period, as the biotech company booked fourth-quarter sales of $2.81 billion. According to Moderna, the decline was primarily due to a lower vaccine volume, but partly offset by an increase in the average selling price of the vaccine.

In addition, a nongovernmental global vaccine organization that coordinated a global shot distribution program, Gavi, recorded $600 million in deferred revenue during the quarter.

Nevertheless, Moderna CFO Jamey Mock told CNBC in an interview that deferred revenue isn’t “really the best way to beat earnings.”

According to him, Moderna is more excited about its lower-than-expected cost of sales, which is one of the main reasons its earnings exceeded analysts’ expectations.

Cost of sales for the fourth quarter was $929 million and for the full year was $4.69 billion. The company wrote down unused doses of the vaccine as part of its efforts to reduce production of the Covid shot.

In November, Moderna said it expected sales costs for the year to total $5 billion.

“We saw some fruit of productivity in the fourth quarter,” Mock said, adding that Gavi’s deferred revenue was “just pure accounting.”

Deferred revenue boosted Moderna’s Covid vaccine sales to $6.7 billion for the full year, an amount first reported in January. As of 2024, it expects sales from the shot to drop even further from 18 billion in 2022.

As of last year, the vaccine held a 48% share of the Covid vaccine market in the United States. Compared to 2022, that’s an increase of 37%.

In 2024, Moderna expects sales to reach approximately $4 billion. Revenue from its vaccine against respiratory syncytial virus, or RSV, is included in that forecast, which could win approval from the FDA on May 12.

“Squawk Box” on Thursday quoted CEO Stephane Bancel as saying the RSV shot will have a competitive advantage because it comes in a pre-filled syringe, making it easier to administer.

We are excited about the potential of Moderna beyond Covid,” said Bancel.

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