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Moderna Stock Plummets 20% After Lowering Guidance on EU Sales and U.S. Vaccine Market Challenges

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Moderna experienced a significant 20% drop in its stock price on Thursday after reporting second-quarter results that, while beating revenue expectations, prompted the company to sharply reduce its full-year sales forecast. The biotech firm now anticipates 2024 product revenue between $3 billion and $3.5 billion, down from its previous estimate of $4 billion.

The revised guidance is attributed to lower-than-expected sales in Europe, heightened competition in the U.S. vaccine market, and potential delays in international revenue. Moderna’s newly approved respiratory syncytial virus (RSV) vaccine, mRESVIA, began shipping in the U.S., but faces stiff competition from existing RSV vaccines by Pfizer and GSK.

Moderna CEO Stephane Bancel highlighted the increased competition for both RSV and Covid vaccines and noted difficulties in securing new contracts with European governments due to tight budgets and existing agreements with Pfizer and BioNTech. The ongoing conflict in Ukraine is also putting strain on government finances.

Despite the current challenges, Bancel expressed optimism for a recovery, projecting sales growth in 2025 and a break-even point by 2026, driven by new product launches.

For the second quarter, Moderna reported:

  • Loss per share: $3.33, better than the expected loss of $3.39
  • Revenue: $241 million, exceeding the $132 million forecast

Revenue from Moderna’s Covid vaccine fell 37% year-over-year, contributing to the company’s net loss of $1.28 billion. However, Moderna achieved a reduction in costs, including a significant drop in sales expenses and a 19% decrease in selling, general, and administrative costs. R&D expenses rose by 6% to $1.2 billion due to increased personnel costs.

Despite these setbacks, Moderna’s stock has risen nearly 20% this year, reflecting confidence in its pipeline and messenger RNA technology. The company is advancing 45 products in development, including a combination vaccine for Covid and flu, and a personalized cancer vaccine with Merck.

Biogen Surpasses Q2 Expectations and Raises Outlook as Alzheimer’s Drug Leqembi and New Products Drive Growth

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Biogen reported second-quarter earnings and revenue that exceeded estimates, leading to an increase in the company’s full-year guidance. The improved outlook is attributed to the successful implementation of cost-cutting measures and stronger-than-expected sales of the Alzheimer’s drug Leqembi and other new products. Biogen now projects full-year adjusted earnings to be between $15.75 and $16.25 per share, up from the previous forecast of $15 to $16 per share.

Despite expecting a slight decline in 2024 sales, Biogen is optimistic about its growth prospects. Leqembi, developed in partnership with Eisai, has shown promising sales figures, generating approximately $40 million in Q2, surpassing the $31 million expected by analysts. This is a significant increase from the $10 million in sales reported last year. However, Leqembi faces regulatory challenges in Europe due to concerns about brain swelling and bleeding risks, which Biogen is currently addressing.

CEO Chris Viehbacher expressed confidence in the company’s new product launches, noting that all are performing in line with or ahead of expectations. Biogen aims to achieve $1 billion in gross cost savings by 2025, with $800 million in net savings. These savings will allow the company to reinvest in new product launches and essential research and development projects.

In addition to Leqembi, Biogen’s acquisition of Reata Pharmaceuticals has brought Skyclarys into its portfolio, which reported $100 million in Q2 sales, exceeding the $92.3 million anticipated by analysts. Skyclarys, approved by the FDA last year, is the first treatment for Friedreich’s ataxia. The company plans to market Skyclarys in 20 countries by the end of the year.

Zurzuvae, the first oral treatment for postpartum depression, also performed well, with Q2 sales of $14.9 million, beating the expected $11 million. However, Biogen’s multiple sclerosis treatments saw a 5% decline in sales, totaling $1.15 billion, due to competition from generics. Despite this, some treatments, like Tecfidera, managed to generate higher-than-expected revenue.