MRNA is building positive momentum. Watch the momentum here
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Operator
Good day and thank you for standing by. Welcome to the Moderna third quarter 2025 conference call. @ this time, all participants are in a listen only mode. After the speaker’s presentation, there’ll be a question and answer session. To ask a question during the session, you’ll need to press star 11 on your telephone. You will then hear an automated message device and your hand has been raised to withdraw your question. Please press star 11 again. Please be advised today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Lavina Tulupdar. Please go ahead.
Lavina Talukdar (Senior Vice President, Head Investor Relations)
Thank you, Kevin. Good morning everyone and thank you for joining us on today’s call to discuss Moderna’s third quarter, 2025 financial results and business updates. You can access the press release issued this morning as well as the slides that we will be reviewing by going to the Investors section of our website. On today’s call are Stephane Bonsell, our Chief Executive Officer, Stephen Hogue, our President and Jamie Mock, our Chief Financial Officer. Before we begin, please note that this conference call will include forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform act of 1995. Please see slide 2 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward looking statements. With that, I will turn the call over to Stephan.
Stéphane Bancel (Chief Executive Officer)
Thank you Lavina. Hello everyone. Thank you for joining us today. I will start with a quick review of the quarter. Jamie will present our financial results and outlook. Steven will review our commercial progress and clinical programs and then I will share our key value drivers as we look ahead. Before we take your questions. In the third quarter our revenue was $1 billion driven by sales of our free approved vaccines Spikevax and Next Pact and RSVR. The net loss for the quarter was $200 million. We ended the quarter with $6.6 billion in cash and investments. We remain highly focused on financial discipline. I’m pleased to announce that continued cost reduction efforts across the company in the third quarter of 2025 led to a 34% reduction of cost of sales, RD and SGA combined compared to the third quarter of 2024. During the quarter, we made good progress across our three strategic priorities. Our first priority driving use of our commercial products for Spikevax, our original COVID vaccine. We received approval in 40 countries for the seasonal 2025-2026 strain. Update MNEXTSpike Our new COVID vaccine was approved this year by the FDA. We also filed and received approval for the 2025-2026 strain update in the US making this the first season that MNEXTSpike is available in the United States. We also received approval for AmnexPak in Canada for RSV vaccine Mresvia. We continue to gain regulatory approval and Amrasvia is now approved in 40 countries. We have strategic partnership with three countries Canada, the UK and Australia where we have established manufacturing facilities and secured multi year offtake agreements. In each of these countries we have achieved important milestones. In Canada, we delivered the first made in Canada, MRNA vaccines to the Canadian government for use this season in the UK and Australia Our facilities were granted licenses by their respective regulatory agencies. Second priority advancing our pipeline to drive sales growth. We announced in July positive phase 3 flu efficacy data which we believe will advance both our flu vaccine program MRNA 1010 and our flu Covid combination program MRNA 1083. For the flu Covid combination program, our filing continues to be under review by the European Medicines Agency in our Oncology portfolio At the European Society of Medical Oncology Congress in October, we presented encouraging Phase 1B data for cancer antigen therapy MRNA4359. Unfortunately, we also announced recently that despite the progress made by the scientific community in understanding the CMV virus, our CMV program did not meet its primary efficacy endpoint for congenital cmv. We will discontinue the development of our CMV vaccine in this indication. Third priority Executing with financial discipline. The team continues to diligently advance our cost improvement program. Over the last four quarters Q4 2024 to Q3 2025 we delivered a $2.1 billion improvement in cost across cost of goods SGNA and R and D versus the prior four quarters. I want to thank the entire Moderna team for this great achievement and we continue to work on prioritizing our R and D pipeline. Growing productivity including by the use of more digital tools including a large number of GPTs, but also better pricing with our suppliers across the entire company. Thanks to this good progress and momentum, we’ve reduced projected 2025 cash cost by approximately $500 million since just the last quarter investor call in August 2025 and by approximately $900 million since the beginning of the year. With this I will hand over to Jamie.
Jamey Mock (Chief Financial Officer)
Thanks Stefan and hello everyone. Today I will provide an overview of our financial results for the third quarter and share our outlook for the remainder of 2025. Let’s start by reviewing our commercial performance which you can Follow on Slide 7 Year to date, total revenue was approximately $1.3 billion with 900 million from the US and the remainder from international markets. In addition to product sales, revenue also includes collaboration, grant and standby revenue associated with our strategic partnerships. For the third quarter of 2025 our total revenue was $1 billion. US revenue was $800 million in the third quarter, the vast majority of which was from our Covid vaccines which included the successful launch of our new COVID vaccine MNEXTSpike. Steven will give more detail on the US Covid vaccination season in a moment. Revenue outside the US was $200 million. Approximately half of international revenue in Q3 was delivered to Canada where we began executing on our strategic partnership through our in country manufacturing facility. As a reminder, we have similar strategic partnerships with the Australian and UK governments and expect to begin shipping locally manufactured product in 4Q25 and 1Q26 respectively. The full year 2025. Outlook we are narrowing our revenue range to 1.6 to $2 billion from our previous guidance of 1.5 to $2.2 billion. For the US market we expect fourth quarter sales of 100 to $400 million. This would bring our updated full year US revenue guidance to 1 to 1.3 billion versus our prior guidance of 1 to 1.5 billion. Our original guidance assumed year over year revenue to be flat to down 33% excluding one time items. Our updated guidance now assumes a year over year decline of 15 to 33%. Covid vaccination rates remain the largest variable to this range which Stephen will walk through in a moment. For international markets, we now expect revenue to be between 300 and $400 million in the fourth quarter bringing the full year to 600 to $700 million versus our previous guidance of 500 to $700 million. We have a tighter range on our international sales as most of these sales are for contracted volumes, leaving delivery timing and final vaccination rates as the only remaining variables. Moving to Slide 8, I will review our 3Q financial results in more detail. Total revenue was $1 billion in the quarter. As I just discussed on the prior page, we had net product sales of $973 million and other revenue of 43 million from grants, collaborations, royalties and standby fees. The 45% year over year decline in revenue was expected and primarily reflects lower COVID vaccine demand. It’s also worth noting that last year’s third quarter included approximately $140 million from a true up adjustment to prior period sales provisions. That benefit did not repeat in Q3 this year. Cost of sales for the third quarter was $207 million, representing 21% net product sales for the quarter. This was a 60% year over year decrease in our cost of sales from $514 million in Q3 last year. The improvement was driven by lower inventory write downs, reduced unutilized manufacturing capacity and lower volume overall. These results reflect the productivity gains and the efficiency improvements we’ve achieved in our manufacturing operations. R and D expenses in the third quarter were $801 million, a 30% decrease from last year. The reduction mainly reflects lower clinical trial costs as we’ve completed Several large phase 3 studies in our vaccine portfolio, as well as efficiency gains across the organization. Last year’s results also included an expense related to the purchase of a priority review voucher. SGA expenses were $268 million in the third quarter, a 5% decrease year over year. The decline mainly reflects lower consulting and external service costs across multiple functions along with reduced digital and facility spending. These savings reflect the cost discipline we’ve built into the organization and our continued focus on streamlining how we operate. Our income tax provision for the quarter was immaterial, consistent with the prior year. We continue to maintain a global valuation allowance against the majority of our deferred tax assets, which limits our ability to recognize tax benefits from losses. Net loss for the quarter was $200 million compared to net income of $13 million in Q3. 2024 loss per share was $0.51 compared to earnings per share of $0.03 last year. We ended Q3 with cash and investments of $6.6 billion, down from $7.5 billion at the end of Q2. The decrease was primarily driven by seasonal impact to working capital. With that, let me take a minute to share the progress we’ve made on our cost reduction goals. As a reminder, our original target this year was to reduce our GAAP operating expenses from $7.2 billion in 2024 to $6.4 billion in 2025 on a cash cost basis, including stock based compensation, depreciation and other non cash charges. That represented a decrease from $6.3 billion in 2024 to $5.5 billion. I’m happy to report that we are now on track to beat our 2025 cost plan by over $1 billion on a GAAP basis and by $900 million on a cash cost basis, both at the midpoint of our projections. During our previous 2Q call, we had lowered our GAAP and cash cost by $400 million each with GAAP costs lowered from $6.4 billion to $6 billion and cash costs lowered from $5.5 billion to $5.1 billion. Today we are further lowering our 2025 expense guidance due to additional progress across the company to drive efficiency gains and continued investment prioritization. Our GAAP operating expense guidance is being reduced by another $700 million from $6 billion to $5.3 billion. At the midpoint, this reduction is $500 million of cash costs plus $200 million of non cash reductions in stock based compensation and depreciation. The $700 million GAAP reduction from prior guidance is split evenly between cost of sales and R and D. We are lowering our cost of sales forecast by 300 to $400 million from $1.2 billion to to a range of 0.8 to $0.9 billion, which reflects an acceleration of the efficiency programs we are targeting as part of our multi year cost out plan. We are also lowering our R and D expense range to 3.3 to $3.4 billion, an approximately $350 million improvement due to continued investment prioritization and efficiency gains in the execution of our clinical trials. In just two years, we expect to reduce our cash cost by approximately 50% from nearly $9 billion in 2023 to $4.6 billion in 2025. We are now ahead of our plans and will update improvements to our 2026 and 2027 targets at our upcoming Analyst Day on November 20th. Importantly, we continue to target cash breakeven in 2028. I would like to take this moment to thank all my Moderna colleagues for their hard work and commitment to improve the financial profile of our company. Moving to Slide 10, I will share our updated 2025 financial framework for total revenue. As I mentioned in my earlier remarks, we are narrowing our range to 1.6 to $2 billion from our previous guidance of 1.5 to $2.2 billion. For cost of sales, our updated guidance is 0.8 to $0.9 billion, an improvement from our previous guidance of $1.2 billion. This updated range assumes a higher cost of sales in 4Q versus 3Q, which factors in similar sales volume and higher unutilized manufacturing charges. Newly introduced tariffs are not expected to have a material impact on our business, but we continue to monitor changes to global tariffs. Our revised R and D range of 3.3 to $3.4 billion projects an increase in 4Q spend due to the seasonality of vaccine trial spend as well as studies in support of regulatory approvals. SG and A expenses are expected to be $1.1 billion. Similar to last year, we expect SG and A expenses in the fourth quarter to increase primarily due to commercial related activity. We expect taxes to be negligible in 2025. We expect our capital expenditures are also supposed to be approximately $300 million. We are increasing our year end cash guidance to 6.5 to $7 billion, an increase of 0.5 to $1 billion from our prior guidance of approximately $6 billion. This increase is projected to increase year end cash due to the reduction in our operating expense for the year. In summary, we have made strong financial progress against our 2025 financial objectives. We have tightened our sales range because of increased visibility into our seasonal sales and we have lowered our 2025 cash cost estimate by $900 million from $5.5 billion to $4.6 billion, resulting in a higher projected year end cash balance of 6.5 to $7 billion. With that, I will now turn the Call over to Stephen
Stephen Hoge (President)
thank you Jamie and good morning or good afternoon everyone. Today I’ll review our current commercial positioning in the US as well as our progress across our pipeline. As you know, COVID vaccine sales still represent the vast majority of our revenues and as Jamie pointed out earlier, the US is our largest market in 2025. Slide 12 reviews the US Covid vaccination market during the fall of 24 and the cumulative vaccinations to date for the retail channel for the fall of 25 as reported by IQVIA. As a reminder, the retail channel represented 72% of the total vaccinations in the fall of 2024. We expect this segment will represent a similar proportion of the market in ...
