Moderna will cut $1.1bn off its annual R&D spend

Moderna is showcasing its R&D pipeline to investors today, but the headline news is a decision to cut its R&D spend by a massive $1.1 billion a year from 2027, reversing years of growth made possible by sales of its COVID-19 vaccines.

With COVID-19 revenues now shrinking fast, Moderna chief executive Stéphane Bancel has taken the decision to rein in spending and reduce the number of active development programmes, which have swelled from 25 in 2020 to a current level of 43.

The decision reflects a need for a "more selective and paced approach" to R&D, he said, and the priority now will be on driving through 10 product approvals between now and 2027, including new COVID-19, influenza, and combined COVID-19/flu vaccines.

"The size of our late-stage pipeline combined with the challenge of launching products means we must now focus on delivering these 10 products to patients, slow down the pace of new R&D investment, and build our commercial business," said Bancel.

In the near term, that means driving uptake of Moderna's Spikevax COVID-19 vaccines and recently-approved mResvia for respiratory syncytial virus (RSV), which is in a tough three-way battle with rival shots from GSK and Pfizer.

2024 revenue forecast cut again

The company is now looking for profitability for the respiratory vaccines unit this year, but has trimmed its net revenues forecast for the year once again, now expecting $2.5 to $3 billion after predicting $3.0 to $3.5 billion in its second-quarter results update.

Along with the COVID-19 and flu vaccines, the 10 priority programmes include shots for cytomegalovirus (CMV) and norovirus – respectively in and close to phase 3 testing – along with two therapies for rare diseases methylmalonic acidaemia (MMA) and propionic acidaemia (PA) in phase 1/2 and Moderna's MSD-partnered vaccine for skin cancer melanoma.

Culled from the pipeline are the company's mResvia programme in infant RSV, mRNA-1287 for endemic human coronaviruses (HCoVs), KRAS-targeted cancer therapy mRNA-5671, relaxin-targeted therapy mRNA-0184 for heart failure, and mRNA-2752, a triplet targeting OX40L, IL-23, and IL-36γ for solid tumours and lymphomas.

Moderna said the changes will reduce the cumulative spend on R&D between 2025 and 2028 to $16 billion from $20 billion, and allow it to break even financially in 2028.

Shares in the company had lost around 8% of their value in pre-market trading on the Nasdaq at the time of writing.