MRNA Q1 Earnings Call: Management Focuses on Cost Reductions and Pipeline Progress Amid Revenue Shortfall

Biotechnology company Moderna (NASDAQ:MRNA) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 35.3% year on year to $108 million. The company’s full-year revenue guidance of $2 billion at the midpoint came in 6.1% below analysts’ estimates. Its non-GAAP loss of $2.22 per share was 28.6% above analysts’ consensus estimates.

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StockStory’s Take

Moderna’s first quarter results reflected the ongoing impact of a shifting COVID-19 vaccine market, with management emphasizing the seasonality of respiratory vaccine sales and continued cost discipline. CEO Stephane Bancel highlighted operational progress, including a 19% reduction in combined R&D and SG&A expenses compared to last year, and reiterated that lower first-quarter revenues were consistent with internal expectations due to a transition to routine seasonal vaccination patterns.

Looking ahead, Moderna’s leadership anchored full-year guidance on potential new product approvals and further cost reductions. CFO Jamey Mock noted that expense guidance for 2025 remains unchanged but outlined new targets for 2026 and 2027, aiming for substantial additional savings. The company is prioritizing regulatory milestones for key pipeline programs, such as next-generation COVID, RSV, and flu vaccines, while continuing to invest in oncology and rare disease candidates. Bancel stated, “We remain focused on our late-stage pipeline to drive sales growth and diversification.”

Key Insights from Management’s Remarks

Moderna’s management attributed Q1 performance to the seasonally low demand for respiratory vaccines, ongoing cost reduction initiatives, and a focus on pipeline advancement. The company’s explanations for the revenue miss centered on broader vaccination trends and product mix rather than operational shortcomings or loss of market share.

• Respiratory Vaccine Seasonality: The low first-quarter revenue was primarily driven by the seasonal nature of COVID-19 and RSV vaccine demand, with most sales expected in the second half of the year. Management noted ongoing normalization of COVID vaccinations into routine patterns and stable U.S. market share based on prescription data.

• Cost Reduction Initiatives: There was a continued double-digit year-over-year decline in combined R&D and SG&A expenses, reflecting management’s emphasis on streamlining operations. CFO Jamey Mock announced plans for further reductions, targeting a 55% decrease in annual GAAP expenses from 2023 to 2027, primarily through winding down large late-stage trials and operational efficiencies.

• Pipeline Prioritization and Advancement: The company advanced regulatory filings for its next-generation COVID, RSV, and flu vaccines, with decisions expected over the next 12 months. Management deprioritized the flu/COVID combination vaccine for younger adults to focus resources on older populations and oncology programs, notably the Checkpoint and Intismeran therapies.

• Regulatory and Market Access Updates: New approvals and tenders in Europe and additional approvals for mRESVIA (RSV vaccine) in Australia, Taiwan, the UK, and Switzerland expanded the company’s commercial footprint. Management expects these markets to contribute to sales as product launches progress.

• Oncology Pipeline Expansion: The prioritization of the Checkpoint program (mRNA-4359), supported by early clinical data, marks a strategic shift toward oncology. Management intends to expand Checkpoint into more cancer indications, leveraging recent data and ongoing collaborations with partners like Merck.

Drivers of Future Performance

Moderna’s outlook for the remainder of the year and beyond is shaped by regulatory milestones, product approval timelines, and continued cost containment efforts. Management underscored the importance of a diversified pipeline and efficient operational execution.

• Regulatory Approval Timing: Success in obtaining regulatory approvals for next-generation COVID, RSV, and flu vaccines, as well as pivotal pipeline programs in oncology and rare diseases, will be critical for future revenue growth.

• Pipeline Diversification and Execution: Management believes that advancing a broad late-stage pipeline, including the Checkpoint oncology program and vaccines targeting norovirus and CMV, will help offset the decline in COVID-19 vaccine demand.

• Ongoing Cost Controls: The company is targeting a further reduction in annual expenses, aiming to reach cash breakeven by 2028. Management highlighted that the majority of future cost savings will come from R&D as large clinical trials conclude and operational efficiencies are realized.

Top Analyst Questions

• Salveen Richter (Goldman Sachs): Asked about extended flu/COVID combination vaccine review timelines and regulatory risks; management explained that FDA’s request for additional flu efficacy data would extend review and is scientifically justified, with ongoing constructive engagement with regulators.

• Jasmine (UBS, for Eliana Merle): Inquired about timing for Phase 3 melanoma data and expansion plans for oncology programs; management said a 2026 readout is still possible for melanoma, with additional studies in renal cell carcinoma and non-small cell lung cancer progressing as planned.

• Tyler Van Buren (TD Cowen): Sought clarification on the status of the next-generation COVID vaccine review; management described interactions with the FDA as "business as usual" and expressed confidence in the regulatory process ahead of the upcoming decision date.

• Courtney Breen (Bernstein): Focused on the new cost-reduction targets and the rationale; management attributed further cuts to the planned completion of large Phase 3 trials and a proactive approach to controlling expenses rather than deteriorating revenue signals.

• Gena Wang (Barclays): Questioned U.S. COVID market share and interim flu data plans; management stated that prescription data indicates stable share in the U.S. and that flu efficacy data will be shared after the season concludes, with no guidance provided on event numbers.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely monitor (1) the timing and outcomes of regulatory decisions for Moderna’s next-generation COVID, RSV, and flu vaccines, (2) progress on late-stage pipeline readouts, particularly in oncology and rare diseases, and (3) the company’s ability to execute further cost reductions as major clinical trials wind down. Additional attention will be paid to commercial uptake in newly approved markets and the initial impact of the Checkpoint program’s clinical data.

Moderna currently trades at a forward price-to-sales ratio of 4.5×. In the wake of earnings, is it a buy or sell? See for yourself in our free research report.

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