The income of the Cambridge, Massachusetts-based biotech company, amounted to $4.75 billion in the period ended June 30exceeding the expectations of Wall Street analysts, driven almost entirely by the sales of its messenger RNA-based vaccine, under the Spikevax brand.
But the rhythm of Moderna’s year-over-year sales growth slowed significantly in the second quarter. The company’s first quarter revenue was more than triple the prior year period. Moderna first introduced its Covid-19 vaccine in late 2020 and it is the company’s only product.
At the same time, Moderna’s profit fell 21% to $2.2 billion due to charges related to expired vaccine doses and changes in purchase commitments.
These included a inventory reduction of $499 million for unused doses that exceeded or are expected to exceed their approved shelf lives. The company also incurred a loss of $184 million in firm purchase commitments and a expense of US$131 million for unused external manufacturing capacity.
The CEO of Moderna, Stephane Bancelsaid much of the cost was due to reduced orders for Covaxthe international initiative to vaccinate low-income countries, led by the World Health Organization and other groups.
“This is mainly related to reduced orders from Covax,” Bancel said in an interview. “This was very disappointing because we signed a contract with Covax. We made very large investments and then Covax said that some of the doses were not needed.”
Moderna also attributed some of the costs to delayed deliveries to other customers, particularly the European Union.
In recent months the governments, drugmakers and vaccination sites have discarded tens of millions of doses of unused covid-19 vaccine amid declining demand, a sea change from the early days of the mass vaccination campaign, when doses were in short supply.
Still, Bancel stressed that the company has advance purchase agreements representing about $21 billion in sales for the year, which will include booster vaccines against covid-19. The company said it expects sales to accelerate in the final quarter of the year from the current quarter, boosted by the approval timing of Moderna’s updated Covid-19 vaccines and related manufacturing ramp-up.
Moderna is the latest drugmaker to post quarterly sales gains due to continued demand for its Covid-19 products, following readings likewise positive from Pfizer and Abbott Laboratories. Eli Lilly & Co. is scheduled to provide its quarterly update on Thursday.
In addition, the company reported a net income of $2.2 billion, or $5.24 per share, down from $2.78 billion, or $6.46 per share, in the same period last year. Wall Street analysts expected earnings of $4.70 per share for the quarteraccording to FactSet.
Moderna also said its board approved a new share buyback program for US$3,000 million.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
