Moderna (MRNA), missed earnings expectations for the fourth quarter due to increased costs from surplus production capacity and lower demand for its Covid-19 vaccine, which is currently the only product on the market. The company reported earnings of $3.61 per share, representing a 68% decrease from the same period in 2021. Moderna generated $5.1 billion in revenue in the fourth quarter of 2022, which was in line with analyst predictions but marked a 30% decline from the same period the previous year. Consequently, Moderna shares fell by as much as 4% during Thursday morning trading.
Despite the earnings setback, Moderna has contracts worth $5 billion for Covid vaccine deliveries in 2023, with additional sales expected this year in the U.S., Europe, and Japan. However, the demand for the shots is decreasing as the pandemic eases, and vaccinations shift to an annual schedule instead of repeated boosters.
Why it matters
Reports state that the U.S. government intends to stop purchasing Covid-19 vaccine shots for the public as early as this summer, and transfer procurement and distribution responsibilities to the private sector. In anticipation, the biotech firm has submitted an application to the FDA for a new vaccine that protects older adults against respiratory syncytial virus (RSV), after receiving encouraging results from a clinical trial.