CEO Stéphane Bancel expressed confidence in Moderna’s first quarter, touting the revenue numbers as a sign of the company’s return to prosperity.
After a tussle with the FDA earlier this year over the acceptance of an mRNA flu vaccine for review, Moderna is leaning on international sales and regulatory approvals to support growth for now. The company reported $389 million in revenue for the first quarter of the year, 50% more than what analysts expected.
But Moderna still recorded a major loss of $1.3 billion for the quarter, primarily due to charges to settle litigation with Arbutus involving a patent for certain lipid nanoparticle delivery technology the companies use. This value came in under analyst expectations of $1.61 billion in net losses, even with the litigation charge.
CEO Stéphane Bancel expressed confidence in the quarter, touting the revenue numbers as a sign of the company’s return to prosperity. The $389 million is 260% more than the $108 million recorded for the same period a year ago.
In particular, vaccines sold $352 million, more than the consensus expectation of $223 million, William Blair wrote Friday morning.
Analysts did not get an update on Moderna’s breakeven expectations, which has been a constant theme on recent earnings calls. Before being hit by a number of high-profile setbacks, the company had expected to be in the black by 2028.
In February, the FDA initially refused to review the mRNA-1010 flu vaccine. That situation has been resolved with the agency now accepting the application and granting a decision date of August 5. But Moderna may well need to revise its breakeven guidance.
“We believe recent U.S. regulatory setbacks for mRNA-1010 (flu vaccine) and potentially mRNA-1083 (combo flu/COVID) could pressure this prior guidance, although there does now appear to be a path forward for mRNA-1010 with a PDUFA date of August 5, 2026,” William Blair wrote.
Still, Moderna has $1.9 billion in cash on hand as of March 31, according to the earnings report. Analysts wondered if executives might strike a deal to bolster the company’s offerings. Bancel reiterated his previous statement that Moderna is focused on building the best mRNA platform. But the company has been interested in other complimentary modalities of late, including a T cell engager called mRNA-2808 that advanced into Phase 1/2 testing late last year.
“We’re very focused on expanding to new modalities to enable new families of medicine,” Bancel said. “We are continuing to look at science across the board, whether it’s from academic labs or from companies, public or private.”
One thing Moderna does not need, thanks to its prolific platform, is more programs to work on, Bancel said. Especially as the company has been cutting back on research priorities and trying to reach the breakeven point.
“If we find the right opportunity to increase what we can do, we will, of course, execute on those priorities, but we don’t have a pipeline problem like most companies in the industry. We have an abundance of products,” Bancel said.
Moderna’s net loss for the quarter would have been lower had it not been for the settlement with Arbutus. In February, a federal judge threw out Moderna’s defenses against a patent infringement case that has been brought by Arbutus.
The smaller biotech argues in the case that Moderna accessed its vaccine delivery technology via a sub-license from a third party but never entered into a license agreement to cover the usage. Moderna has argued that Arbutus’ patents are invalid due to obviousness. But the courts and patent office have not agreed and Moderna has to pay $950 million to settle the matter.
This charge did not impact Moderna’s cash for the quarter but litigation-related expenses dogged earnings for the period to the tune of $895 million. The actual payout to Arbutus will occur in the third quarter.
Absent the litigation charges, Moderna’s net loss would have been about $500 million, Bancel said.
Moderna still expects to deliver 10% revenue growth this year while reducing operating expenses. Jefferies noted that the company has leverage to do so through discretionary cuts and AI-driven savings.
