Moderna to Cut $1.1 Billion in R&D Spending: Halts 5 Projects by 2027
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Moderna to Cut $1.1 Billion in R&D Spending: Halts 5 Projects by 2027
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Moderna to Cut $1.1 Billion in R&D Spending: Halts 5 Projects by 2027.
On September 12, 2024, Moderna announced at its annual R&D event that it plans to reduce research and development (R&D) expenditures by $1.1 billion by 2027.
This move comes alongside a delay in the company’s projected break-even target, now set for 2028, two years later than originally planned. Moderna is adjusting its financial and development strategies to adapt to the post-pandemic commercial landscape.
The company revealed it would adopt a “more selective and paced approach” to its growth strategy, reducing R&D spending from $4.8 billion in 2024 to $3.6–3.8 billion by 2027. Along with this, five early-stage projects will be halted:
mRNA-1287 – A vaccine intended to prevent human coronavirus outbreaks will be discontinued before entering clinical trials, despite previous claims that these viruses cause 1 million outpatient visits annually in the U.S.
mRNA-1345 – A respiratory syncytial virus (RSV) vaccine for infants under two years old. Based on recent clinical data, the company expects that the Phase 1 study will not progress.
mRNA-5671 – A KRAS-specific cancer vaccine for solid tumors has been shelved, with no plans for further development.
mRNA-2752 – A triplet cancer therapy candidate has been deprioritized after evaluating the latest clinical data.
mRNA-0184 – A heart failure treatment candidate, which will conclude its Phase 1 study.
Notably, Moderna’s cancer vaccine collaboration with Merck, mRNA-4157, has also encountered regulatory challenges. Preliminary feedback from the U.S. Food and Drug Administration (FDA) indicated that the current data does not support accelerated approval. Negotiations between the two companies are ongoing, but approval could be delayed until data from a large-scale Phase 3 melanoma trial is available.
In addition to the R&D adjustments, Moderna plans to focus on expanding its portfolio of first-in-class vaccines and therapies in oncology, rare diseases, and non-respiratory conditions. The company aims to secure approval for 10 products over the next three years.
By 2026, Moderna hopes to launch five commercial vaccines targeting the most burdensome respiratory viruses. This includes next-generation COVID vaccines, a combined flu and COVID vaccine, and an RSV vaccine for high-risk young adults, all of which will be submitted for regulatory approval this year.
From 2026 to 2028, the company plans to strengthen its portfolio with products like the cytomegalovirus (CMV) vaccine (with pivotal Phase 3 data expected by the end of 2024), the norovirus vaccine (set to begin a pivotal Phase 3 trial), and treatments for propionic acidemia, methylmalonic acidemia, and melanoma.
CEO Stéphane Bancel stated: “The scale of our late-stage pipeline and the challenges of bringing products to market mean we must now focus on delivering these 10 products to patients, slow down new R&D investments, and build our commercial operations.”
On Thursday, Moderna also provided a financial update, revising its break-even timeline to 2028, with projected revenues of $6 billion. This forecast excludes stock-based compensation, depreciation, and amortization costs. Previously, the company had anticipated reaching break-even by 2026. Moderna also noted that it has sufficient cash reserves to support its operations until it achieves break-even on a cash-cost basis.
Despite these reassurances, Jefferies analyst Michael Yee expressed skepticism in a note to investors, stating that investors are “unlikely” to believe Moderna’s projections “until further proof of credibility is demonstrated.”
The strategic shifts come as Moderna strives to regain stability in the post-pandemic market. The company reported a loss of $4.7 billion last year due to a sharp drop in COVID vaccine revenues, down from $8.4 billion in net income in 2022.
In its second-quarter earnings report, Moderna posted revenues of $241 million and had to lower its 2024 full-year forecast due to contract delays and declining demand for COVID vaccines. The company now expects annual revenues of $3–3.5 billion, down from an earlier estimate of $4 billion.
At that time, Jefferies analysts highlighted the downward revision and noted that it “further intensified” concerns about Moderna’s profitability.
Moderna to Cut $1.1 Billion in R&D Spending: Halts 5 Projects by 2027
Sources:
- Moderna official site
- “Moderna Slashes R&D Budget by $1.1B, Eyes 10 Approvals Through 2027” by Tristan Manalac, September 12, 2024
- “Moderna Targets $1.1B in R&D Spending Cuts, Drops 5 Programs Amid Profitability Pressures” by Nick Paul Taylor, September 12, 2024
(source:internet, reference only)
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