Plans $1 billion in cost savings and 10 product launches

Moderna The company said Thursday it plans to cut about $1.1 billion in expenses through 2027 and secure approvals for several new products as it charts a path after a sharp COVID-19-related decline in business.

Biotechnology company Moderna Inc. said it expects to have 10 new products approved by 2027. But it said it would pause development of some products in its pipeline and scrap others as it seeks to “pace” new research and development spending.

The company aims to reduce its research and development expenses from an expected $4.8 billion at the end of this year to a range of $3.6 billion to $3.8 billion in 2027, according to the announcement.

“Things will start to calm down as we have studies that are basically finished and not even started,” Moderna CEO Stephane Bancel told CNBC, adding that the company is putting its latent product portfolio on “hold.” Latent refers to a category of viruses that can lie dormant in a patient’s body for an extended period of time without causing symptoms, but then reactivate and cause serious health complications.

Still, Moderna’s shares fell more than 15% on Thursday.

Mani Foroohar, an analyst at Leerink Partners, said in an email on Thursday that the company’s earnings release “quells a key element of bullishness” for the stock and reflects a weakening financial position.

“The R&D cuts are so far in the future that it’s hard to believe management, who have repeatedly proven unable to predict the performance of their business,” Forouhar said.

The bulk of the cost savings won’t come until 2027, with “profitability delayed until 2028,” Jefferies analyst Michael Yee said in a research note on Thursday.

Moderna has previously said it expects to reach “breakeven” and return to growth in 2026.

Moderna Inc. also announced Thursday that it has seen positive results from a late-stage clinical trial of its respiratory syncytial virus vaccine in high-risk adults ages 18 to 59 and plans to submit the vaccine for approval in that age group later this year. The company also announced positive data on its investigational standalone flu vaccine in adults ages 65 and older.

The company gave these updates Thursday at its annual R&D Day investor event in New York, which focuses on updates on its product pipeline and long-term business. This comes about four months after U.S. regulators approved Moderna’s respiratory syncytial virus vaccine for seniors, which is the company’s second commercially available product after its COVID-19 vaccine.

The company said it currently has five respiratory vaccines that have shown positive results in Phase 3 trials, with three of them on track to be submitted for regulatory approval this year. These include Moderna’s combination vaccine targeting COVID-19 and influenza, which it plans to submit for regulatory approval in the U.S. later this year, as well as a new, more effective version of its COVID-19 vaccine.

Moderna also has five non-respiratory products targeting cancer, latent viruses and rare diseases that could be approved by 2027, according to the company’s announcement.

The company expects revenue to be between $2.5 billion and $3.5 billion in 2025. From 2026 to 2028, Moderna expects compound annual growth rates of more than 25% driven by new product launches.

Moderna expects some products to be approved in 2025, but the company “does not expect significant revenue contribution until next year,” Moderna Chief Financial Officer Jamie Mock told investors during the event.

Bancel said the company’s success rate in drug development from phase 1 to phase 3 is “six times higher” than the rest of the biotech and pharmaceutical industry.

“What the team has done is really impressive and leaves us with a lot of effective medicines, and that’s why we need to pace our investments in research and development,” he told CNBC.

Moderna has released new data on its respiratory syncytial virus vaccine, mRESVIA, which is approved for adults aged 60 years and older in the United States and European Union.

The vaccine met all key efficacy objectives in an ongoing Phase 3 trial in adults aged 18 to 59, who are at high risk of becoming seriously ill from the virus, the company said, adding that no safety concerns were identified.

Currently, there are no RSV vaccines approved anywhere in the world for high-risk adults, such as those with weakened immune systems or young adults with chronic conditions such as asthma or diabetes. Moderna’s main rivals in the RSV field are Pfizer and GSKis also seeking approval to expand the age range.

Bancel said the company plans to use a “priority review voucher” to submit its application for approval in people between 18 and 59 years old, which will shorten the time it takes the Food and Drug Administration to review the product from 10 months to six. Moderna hopes the agency will approve mRESVIA for that age group by the 2025 RSV season.

“There are millions of people who could benefit. … They’re also doing it to stay competitive in the marketplace, because if you’re a large retail pharmacy, you want to offer your products to every customer who comes in,” Bancel said.

However, the company is also suspending development of its RSV vaccine for infants under two years of age based on “new clinical data.”

Moderna Inc. announced that its experimental standalone influenza vaccine, mRNA-1010, boosted immune responses against the virus compared to existing influenza vaccines in a recent Phase 3 clinical trial. The vaccine has shown “consistently acceptable safety and tolerability” in three late-stage clinical trials, the company added.

Meanwhile, Moderna said it plans to move its vaccine against norovirus, a highly contagious gastroenteritis that causes vomiting and diarrhea, into Phase 3 testing “soon.” If the data is positive, Bancel said the company believes it could finish the study within a year and apply for approval soon after.

“This product may take two years to come out, but it’s great because right now there’s nothing that can treat norovirus,” he said. “A lot of health care workers get it from their patients.”

Moderna also Merck Combination therapies with Keytruda are being studied in patients with various forms of cancer to develop a personalized cancer vaccine.

The two companies are studying the vaccine in Phase 3 clinical trials in patients with the deadly skin cancer and are in discussions with regulators about approval based on mid-stage study data on the vaccine.

But Moderna said that based on existing data, the FDA “does not support” granting the vaccine so-called accelerated approval, a designation that allows the FDA to more quickly approve drugs that fill an unmet medical need for a serious condition.

“We continue to engage with regulators and generate further data,” Bancel said.

–CNBC’s Angelica Peebles contributed to this report.