Moderna cuts staff amid operating 'uncertainty'
Stéphane Bancel, Moderna's chief executive.
Moderna has announced a new cost-cutting round as it tries to pare down its annual costs, with a new commitment to cut 10% off its headcount by the end of the year.
The target is to reduce its workforce to less than 5,000 from a level of 5,800 at the end of 2024, said chief executive Stéphane Bancel in a memo to staff today, in another retreat for a company that has seen dramatic growth in recent years on the back of strong COVID-19 vaccine sales.
Bancel said the move was "a difficult decision but necessary step forward" that was "essential to remain focused and financially disciplined, while continuing to invest in our science on the path to 2027."
The biotech is facing an uncertain operating environment, with declining COVID-19 sales, slow growth of its recently approved respiratory syncytial virus (RSV) vaccine, and a changing regulatory framework in the US under the Trump administration that Bancel said had introduced "uncertainty regarding policies and priorities shaping our industry."
Recent events include a narrower-than-sought FDA approval for its new COVID-19 booster shot, the addition of warning labels to mRNA-based COVID-19 jabs, and the withdrawal of a filing for its combination flu/COVID-19 shot with an acknowledgement that it would need to wait for efficacy data from the mRNA-1010 study before it could resubmit.
The company also lost over $760 million in flu vaccine contracts awarded by the Biden administration that were cancelled by Trump's Health and Human Services (HHS) Secretary, Robert F Kennedy Jr, who is steering the FDA towards an increasingly vaccine-sceptic stance.
With its infectious disease pipeline now facing increased operating risk, shares in Moderna have been declining since Trump took office, and are currently trading 20% down on the start of the year.
The drive to reduce costs dates back to before Trump's second term, but the targeted savings have swelled since then and – in May – Moderna said it intended to trim expenses by around $1.5 billion by 2027.
During its first-quarter results, when the company recorded a net loss of $1 billion, it predicted operating costs would be between $4.7 billion and $5 billion in that year. It is due to report its second-quarter results tomorrow.
"Our mission remains unchanged. With three approved products and the potential for up to eight more approvals in the next three years, the future of Moderna is bright," asserted Bancel.
"We are sharpening our focus, becoming leaner, and staying ambitious in oncology, rare diseases and latent viruses."
