Moderna, Inc. Q2 FY2025 earnings call

• Financials: Q2 revenues of $2.1 billion and a loss of $0.8 billion were in line with expectations, reflecting the seasonal nature of the respiratory vaccine business. Ended Q2 with $7.5 billion in cash and investments.
• Cost Reduction: Continued cost reduction efforts led to a 35% reduction in cost of sales and SG&A combined compared to Q2 2024, and a 40% reduction in operating expenses on a cash cost basis ($581 million reduction year-over-year).
• Product Approvals: Secured 3 FDA approvals in Q2: mNEXSPIKE COVID vaccine, mRESVIA RSV vaccine for high-risk 18-59 year olds, and full approval of Spikevax for high-risk children 6 months to 11 years.
• Pipeline Progress: Positive Phase III efficacy data for flu, advancing the flu program and flu+COVID combo. CMV Phase III study has accrued sufficient primary endpoint cases, norovirus study is accruing cases, and oncology pipeline is making progress with intismeran and mRNA-4359 studies.
• Cost Efficiency: Aiming to reduce annual GAAP operating expenses from $11 billion in 2023 to less than $5 billion in 2027, with focus on R&D, manufacturing, procurement, and workforce restructuring.

In the second quarter of 2025, Moderna's revenues totaled $2.1 billion with a loss of $0.8 billion. Net product sales were $114 million, primarily from COVID vaccine sales, with the U.S. accounting for approximately 80% of this. Other revenue was $28 million. Cost of sales for the quarter was $119 million, relatively flat year-over-year. R&D expenses were $700 million, down 43% from the prior year, and SG&A expenses were $230 million, down 14% year-over-year. The company ended the quarter with $7.5 billion in cash and investments.

• Revenue: Updated 2025 projected revenue range to $1.5 billion to $2.2 billion, reflecting a timing shift of U.K. COVID shipments to Q1 2026.
• R&D: Lowered R&D expense forecast to $3.6 billion to $3.8 billion due to Phase III trial wind-downs and portfolio prioritization.
• SG&A: Expected to be $1.1 billion, with higher second half due to commercial activity and severance.
• Cash and Investments: Expect to end 2025 with approximately $6 billion in cash and investments.
• Cost Reduction: Target to reduce annual cash costs from $8.9 billion in 2023 to $4.2 billion in 2027, driven by R&D expense reduction, manufacturing efficiencies, procurement savings, and workforce restructuring.

• Regulatory Uncertainties: Delays or rejections in product approvals could impact revenue.
• Market Competition: Intense competition in the vaccine and biotech space could affect market share and pricing.
• Cost Structure Changes: Challenges in executing cost reduction targets could impact profitability.
• Tariffs: Potential impact of global tariff changes on cost of sales.

Q: Can you put the changes to CMV in context and discuss cadence of data reads for oncology programs?

A: Stephen Hoge discussed adding secondary endpoints in the CMV study for a more comprehensive analysis and provided insights on the cadence of results from intismeran studies, noting they are event-driven.

Q: How to think about pricing for COVID vaccine in U.S. this year?

A: James M. Mock stated pricing and contracting are factored into the revenue range, with confidence within the range but no specific details on pricing.

Q: Expectations for COVID vaccine demand this fall and winter?

A: Stephen Hoge mentioned early signs from the spring booster campaign in the U.S. were encouraging, but full picture expected by end of Q3.

Q: Balancing late-stage infectious products and seasonality shift?

A: James M. Mock and Stéphane Bancel discussed balancing investments in late-stage pipeline while being financially disciplined, focusing on a diversified portfolio and partnerships.

Q: INT trial in first-line metastatic melanoma and CMV secondary endpoints?

A: Stephen Hoge explained the rationale for the INT trial in metastatic melanoma and details on adding secondary endpoints in the CMV study for a thorough analysis.

Q: Business development in China and COVID+flu filing sequence?

A: Stéphane Bancel discussed mRNA platform and partnerships, while Stephen Hoge mentioned concurrent filing possible but pragmatic sequencing likely for COVID+flu combo.