On Thursday, Evercore ISI reiterated its In Line rating and $105.00 price target for Moderna (NASDAQ:MRNA), following the company's comprehensive research and development overview and financial guidance update prior to its R&D Day in New York City. Management at Moderna has recognized the necessity to reduce spending, with a focus on pipeline prioritization and cost efficiencies expected to save approximately $1.1 billion in R&D expenses starting in 2027.
The firm provided new intermediate-term financial guidance and noted that the FDA does not currently support an accelerated filing for Moderna's investigational cancer vaccine (INT). This update may come as a disappointment to investors, especially considering Merck's previously conservative stance on the matter.
Moderna has shifted the expected timeline for its Phase 3 CMV vaccine data, now anticipated by the end of 2024, rather than the second half of the year. Additionally, the company aims to start producing pivotal data for rare diseases, such as MMA and PA, by the end of 2024.
The use of Priority Review Vouchers (PRVs) is a significant component of Moderna's R&D spending for 2024. The company plans to utilize PRVs for filing approvals for its next-generation COVID vaccine (mRNA-1283), a flu/COVID combination vaccine (mRNA-1083), and a supplemental Biologics License Application (sBLA) for its RSV vaccine (mRESVIA) for individuals aged 18 to 59.
Furthermore, Moderna has decided not to seek accelerated approval for its standalone flu vaccine (mRNA-1010), opting to continue with a confirmatory trial supported by funding from a deal with Blackstone (NYSE:BX). Today, the company has also announced positive data for its RSV vaccine mRESVIA in the 18 to 59 age group, its flu vaccine mRNA-1010 in individuals 65 and older compared to a high-dose flu vaccine, and its Norovirus vaccine (mRNA-1403).
In other recent news, Moderna has made significant strides in its business operations and financial outlook. The company adjusted its forecast to achieve a break-even status by 2028, setting a revenue goal of $6 billion to coincide with this target. This comes alongside a decision to reduce its R&D expenses by $1.1 billion by 2027, leading to a delay in its profitability timeline.
Moderna's revenue guidance for 2025 has been revised to a range of $2.5 to $3.5 billion, falling short of market consensus. Despite this, Jefferies maintained its Buy rating on Moderna, suggesting the updates align with their projections.
On the vaccine front, Moderna announced advancements with three respiratory vaccines anticipated for regulatory approval in 2024. The company's updated COVID-19 vaccine, Spikevax, targeting the JN.1 variant, is nearing approval in the European Union, following recent authorization in the UK, Japan, and Taiwan.
Financial analysts from Brookline Capital Markets and Piper Sandler both maintained their positive ratings on Moderna, projecting the COVID-19 vaccines to generate significant sales for the company in 2024. However, HSBC (LON:HSBA) upgraded Moderna's stock from Reduce to Hold due to an unexpected dip in COVID-19 vaccine revenue.
InvestingPro Insights
As Moderna (NASDAQ:MRNA) navigates through the development of its pipeline and the optimization of its R&D spending, it's worth noting the company's financial health and market performance. According to InvestingPro data, Moderna holds a market capitalization of approximately $30.56 billion, reflecting investor valuation of the company. Despite facing a significant revenue decline of 52.6% in the last twelve months as of Q2 2024, Moderna has demonstrated resilience with an 8.27% return over the last week, showcasing investor response to recent developments and updates.
Two InvestingPro Tips that are particularly relevant to Moderna's current situation include the company's ability to hold more cash than debt on its balance sheet, providing financial flexibility in its operations, and the fact that analysts do not anticipate the company will be profitable this year, underscoring the importance of the cost-saving measures and pipeline prioritization mentioned in the article. For additional insights and metrics on Moderna, including more InvestingPro Tips, interested readers can find a wealth of information at https://www.investing.com/pro/MRNA.
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