Moderna reports surprise profit, sets out road map for RSV vaccine

By Patrick Wingrove and Leroy Leo

(Reuters) -Moderna on Thursday reported a surprise fourth-quarter profit, helped by cost cutting and deferred payments, and set out a commercial roadmap for its vaccines in Europe and experimental respiratory syncytial virus (RSV) shot.

Shares jumped 8% to $94.65 in early trading, still well off the record high of $497.49 hit during the peak of the COVID pandemic in 2021.

Waning demand for COVID vaccines and anticipation of a loss for 2023 led to a steep decline in Moderna's shares last year.

Moderna posted a profit of $217 million, or 55 cents a share, for the quarter. Analysts had expected a loss of 97 cents a share, according to LSEG data.

Moderna Chief Financial Officer James Mock in an interview said the company beat its own forecast because of unexpected deferred revenue of $600 million from the international vaccine group Gavi.

The company also saved around $300 million from its effort last year to adjust its manufacturing output, he said.

"Our resizing was mostly completed at the end of the third quarter, but there is still plenty of work to do to drive additional productivity," he said.

Lee Brown, healthcare lead at global research firm Third Bridge, said Moderna's resizing and other cost-saving efforts would allow the company to invest in further growth.

The Cambridge, Massachusetts-based drugmaker reported fourth quarter sales of $2.8 billion from its COVID vaccine, its only commercial product, down 43% from 2022 but in line with analysts' expectations.

Moderna on an investor call said it could not compete in the EU in the second half of last year because of a competitor contract, but was participating in the bloc's 2024 tender for up to 36 million doses of COVID vaccines per year for up to four years.

Mock said he was not sure how long the EU tender would take, but would "imagine a decision in the coming months" in time for the fall market.

The company has been banking on its experimental shots including for RSV, influenza and cancer to make up for declining COVID revenue.

Moderna expects a U.S. approval decision for its RSV vaccine by May 12. The company said it also planned to launch its RSV shot in Germany and Australia this year.

Jefferies analyst Michael Yee in a note said he expects "a fairly smooth FDA approval."

Analysts estimate the shot will generate $280 million in 2024.

Data posted earlier this month showed the vaccine was 63%effective at preventing RSV-related respiratory symptoms after 8.6 months, down from 84% at 3.3 months.

The results raised concerns among investors over faster efficacy declines compared with rival shots from GSK and Pfizer, both of which launched last year.

The company said it expects to have further data on the vaccine's effectiveness in generating neutralizing antibodies by the end of the year.

Moderna also expects data from late-stage trials of its next generation COVID shot and its cytomegalovirus and COVID-flu combination vaccines this year.

In November, the company pushed back the launch of its flu shot from 2024 to the following year. It said it intends to file for approval this year.

The company reaffirmed its 2024 forecast of $4 billion in sales, the lowest figure for annual revenue since its COVID vaccine got U.S. emergency authorization in late 2020.

Analysts on average estimate the company will bring in $4.48 billion in 2024 revenue, down 33% from 2023.

"Last year was a year of transition that we had to do, and the volume was not quite what we had expected it to be," Mock said. "We took actions to resize the company and we're excited to execute in 2024."

(Reporting by Patrick Wingrove in New York and Leroy Leo in Bengaluru; Editing by Bill Berkrot)