Moderna Releases Financial Outlook and Plans To Cut $1B in R&D Costs

Drugmaker Moderna released updated financial projections and has announced plans to reduce research and development costs over the next couple of years. The company predicts sales figures to hit somewhere in the $2.5-$3.5 billion range in 2025. Moderna also expects revenue to grow 25% annually between 2026 and 2028.

Moderna will be releasing 10 new products, which include a new COVID-19 and flu combination shot. Drugs related to cancer treatment, latent viruses, and rare diseases are also being tested.  

In June, the Federal Drug Administration approved an updated COVID-19 vaccine that targets the JN.1 variant of the virus. However, the approvals for other drugs still in trial could take another two years, which means Moderna won’t see much return from them right away.

“For 2025, we might have some new product approvals assumed, but there’s not assumed to be much revenue from them,” said Moderna Chief Financial Officer James Mock, per Reuters.

Moderna has been working on a respiratory syncytial virus (RSV) vaccine for high-risk adults, 59 years old and younger. Recent tests revealed positive data, prompting the company to seek federal approval. U.S. regulators approved Moderna’s RSV vaccine for seniors earlier this year.

Speaking with CNBC, Moderna CEO Stephane Bancel noted that the company has a strong track record of advancing drugs from phase one to phase three. The rate is “six times higher” than other companies in the industry.

“That’s really a remarkable achievement that the team has accomplished, leaving us with a lot of drugs that are working, which is why we need to pace ourselves in terms of R&D investment,” he said. 

While the new products wait to be approved, Moderna will also be reducing expenses. Over the next few years, the vaccine maker will be cutting around $1 billion in costs and stopping research on some products. This year, about $4.8 billion will be spent on R&D. Yet, the company wants to trim that to between $3.6 billion to $3.8 billion by 2027.

When the COVID pandemic hit, Moderna did not have a problem spending money on R&D as demand for its vaccine was at an all-time high. However, interest in getting vaccinated has since waned, which has likely prompted the pharmaceutical giant to reevaluate its budget and cut back.