Moderna Posts Earnings Beat. There’s Good News on Covid Vaccines Too.

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Good news from

Moderna

‘s first-quarter results: A massive beat on earnings and an optimistic message on the outlook for sales of Covid-19 vaccines, concerns over which have shaken investor sentiment in the biotech.

Moderna

(ticker: MRNA) reported profit of 19 cents a share in the first three months of 2023 on revenue of $1.9 billion. Shares in Moderna was down 1.6% after rising soon after the earnings were released.

The biotech company, which was a leader in developing the first Covid-19 vaccines, was expected to report a loss of $1.75 a share on revenue of $1.2 billion, based on the estimates of analysts surveyed by FactSet.

Moderna in February reiterated its guidance for around $5 billion in Covid-19 vaccine sales contracted for delivery in 2023, and did so again on Thursday. The company added that it was in negotiations for new orders for later this year in the U.S., Japan, and the European Union. While Covid vaccines have delivered Moderna a windfall in prior quarters, expectations have risen that the group may face headwinds amid stiff competition in a market where demand is cooling.

“We are encouraged by the progress of new Covid-19 vaccine contracts in the U.S. for this fall with pharmacy chains, hospital networks and multiple U.S. government agencies. Similar discussions are ongoing with Japan, the EU, and other key markets such as Australia, which recently ordered additional Covid-19 vaccines,” said Stéphane Bancel, the company’s CEO, in a statement.

This is breaking news. Read a preview of Moderna’s earnings below and check back for more analysis soon.

The biotech

Moderna

is at a turning point, as the government-financed Covid-19 vaccine sales bonanza winds down, and focus turns to the company’s pipeline of vaccines and cancer treatments. As the company reports its first-quarter financial results on Thursday, investors will be listening for updates on the future of the Covid-19 vaccine franchise, and any developments in the company’s extensive pipeline.

Moderna (ticker: MRNA) shares have fallen 26.6% so far this year as investors have cooled on the Covid-19 opportunity, amid dropping case counts and expectations of evaporating vaccination rates.

Analysts expect Moderna to report sales of $1.2 billion for the first quarter of 2023, down from $6.1 billion in the first quarter of 2022, according to FactSet, and expect a loss on the quarter of $1.75 per share. The company earned $8.58 per share in the same quarter last year.

Moderna said in February that it had $5 billion in Covid-19 vaccine sales contracted for delivery in 2023, and expected product sales for the first half of the year of $2 billion.

Investors will be listening on Thursday for any indications of a change to those expectations. The Financial Times over the weekend reported that Moderna’s Covid-19 vaccine rivals

Pfizer

(PFE) and

BioNTech

(BNTX) are negotiating a deal to provide 70 million doses of their vaccine to the European Union each year, leaving no room for Moderna in the EU market.

What’s more, the 70 million dose order was lower than some analysts had expected, a further sign that vaccine demand will continue to drop.

“We believe the new proposal could not only prompt a revision of COVID revenue estimates across the Street, but also put pressure on both BNTX and MRNA to demonstrate the ability to diversify revenue away from COVID,” J.P. Morgan analyst Jessica Fye wrote in a note out on Sunday.

Moderna shares were up 0.4% on Monday, down 1.5% on Tuesday, and flat on Wednesday.

Beyond the Covid-19 vaccine, attention has focused on the company’s personalized cancer vaccine, a therapeutic known as mRNA-4157 on which Moderna is joining with Merck (MRK). In mid-April, the companies released updated data on the drug. While the drug is one of the most intriguing under development, the path to approval remains a long one.

In the more immediate future, Moderna is developing respiratory vaccines to add to its portfolio, including an influenza vaccine. It aims to sell combination vaccines that offer protections both against influenza and Covid-19.

The company has scheduled an investor call for 8 a.m. on Thursday.

Write to Josh Nathan-Kazis at [email protected]