- Q2 sales and earnings beat estimates
- Shares plunge on full-year downgrade
- RSV vaccine doses ship ahead of winter
Investors can be a tough bunch to please, just beating expectations is often not enough.
Biotechnology firm Moderna (MRNA) is a case in point, with its shares slumping 21% overnight despite second quarter earnings coming in ahead of Wall Street estimates as the company slashed its full year sales forecast.
The shares registered one of their biggest daily falls on record which leaves them down 18% for the year. As recently as May the shares had almost doubled from the lows in the spring reflecting optimism over cost cutting plans and new product launches.
QUARTERLY BEAT BUT SALES GUIDANCE CUT
Moderna is in a transitional phase where it is managing falling demand for its Covid-19 vaccine as it becomes a seasonal disease and launching new products based on its unique MRNA technology, to get back to sales growth.
Second-quarter sales were more resilient that analysts expected falling by 30% year-on-year to $241 million, comfortably ahead of consensus estimates of $132 million.
The company posted a net loss of $1.28 billion or $3.33 per share, slightly narrower than the $3.62 per share recorded in the second quarter of 2023 and ahead of Wall Street estimates calling for losses of $3.39 per share.
Chief executive Stephane Bancel said the beat partly reflected the good progress the company had made in cutting costs.
However, the firm made a 15% to 25% cut to its full-year sales forecast with product revenue now expected to be between $3 billion and $3.5 billion, down from previous guidance of $4 billion.
The company blamed the shortfall on a combination of lower-than-expected sales to the European Union amid strained government budgets, potential revenue deferrals in some international markets and an ‘increasingly competitive’ environment in respiratory vaccines in the US.
Slower European sales may also have been impacted by a recent agreement between rival vaccine-maker Pfizer (PFE;NYSE) and the European Commission to supply Covid-19 doses over the next four years.
NEW PRODUCT LAUNCH
On a more positive note, Moderna started shipping doses of its RSV (respiratory syncytial virus) vaccine mRESVIA into the US after the drug received regulatory approval in May for adults.
The vaccine will go up against GSK’s (GSK) Arexvy and Pfizer’s Abrysvo which are battling it out for market share. Arexvy holds around two-thirds of the new RSV vaccine market and generated £1.2 billion of revenue for GSK in 2023.
