Moderna misses on earnings as costs rise from surplus production capacity, lower Covid shot demand

Moderna on Thursday missed earnings expectation for the fourth quarter, as costs rose from surplus production capacity and lower demand for its Covid-19 vaccine, the company’s only product on the market.

Moderna reported quarterly earnings of $3.61 per share, a 68% decrease from the same period in 2021 when it booked $11.29 per share. The figure fell short of the $4.68 a share Wall Street expected.

The Boston biotech company generated $5.1 billion in revenue in the fourth quarter of 2022, which was in line with analyst expectations but a 30% drop from the same period in 2021.

Moderna shares fell more than 3% in pre-market trading.

Moderna has signed contracts on the books for $5 billion in Covid vaccine deliveries for 2023. Though the company is expecting additional sales in 2023 in the U.S., Europe and Japan, demand for the shots is falling as the pandemic eases and life returns to normal.

Here’s how the company performed compared with what Wall Street expected, based on analysts’ average estimates compiled by Refinitiv:

• Adjusted earnings: $3.61 per share, vs. $4.68 expected
• Revenue: $5.1 billion, vs. $5 billion expected

Moderna sold $18.4 billion in vaccines during 2022, a 4% increase over the previous year and the company’s high-water mark for revenue during the pandemic. The company booked net income of $8.4 billion in 2022, a 31% decrease over 2021.

The company said its costs increased 25% in the fourth quarter. These expenses included a $297 million write off for vaccines that have exceeded their shelf life, $376 million from unused manufacturing capacity and a $400 million royalty payment to the National Institute of Allergy and Infectious Diseases.

Though the Covid shot remains Moderna’s only product on the market, the company plans to ask the Food and Drug Administration in the first half of this year to approve its vaccine that protects older adults from respiratory syncytial virus after reading out positive data.

The FDA has also designated Moderna and Merck’s personalized cancer vaccine as a breakthrough therapy, which could expedite development and regulatory review of the shot.

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