September 20, 2024
In a recent move to navigate commercial challenges and establish a diversified portfolio, Moderna unveiled a reprioritization plan during its R&D day. This strategic shift aims to position the company as a top-tier standalone player in the biopharmaceutical industry, extending its reach beyond its initial focus on COVID-19 and infectious diseases.
Reducing R&D Expenses and Targeting Profitability
Moderna's plan involves reducing its annual R&D expenses by approximately $1.1 billion starting in 2027. The company expects its R&D expenses to decrease from an anticipated $4.8 billion in 2024 to a range of $3.6-3.8 billion in 2027. This cost-cutting measure is a crucial step towards achieving profitability and ensuring the long-term sustainability of the company's operations.
While Moderna had previously projected breaking even in 2026, the revised strategy targets breaking even on a cash cost basis by 2028. This two-year delay reflects the company's updated financial management plan and its recognition of the challenges associated with launching new products and establishing a diverse portfolio. Still, Moderna maintains that current capital reserves are sufficient to fund operations until then.
Prioritizing Vaccines and Oncology
In the near term, Moderna prioritizes establishing a robust portfolio of five commercial respiratory vaccines targeting high-burden viruses. This includes a next-generation COVID-19 vaccine, a combination flu/COVID vaccine, and an RSV vaccine for high-risk younger adults. These products are all slated for regulatory submissions in 2024.
Additionally, Moderna plans to expand its commercial portfolio with first-in-class vaccines and therapeutics that address non-respiratory diseases, such as cytomegalovirus, norovirus, propionic acidemia, methylmalonic acidemia, and melanoma.
However, in the longer term, Moderna plans to shift its R&D focus towards oncology and rare diseases, and moderate the pace of its investments in vaccines. The company's goal is to achieve 10 product approvals over the next three years, primarily from its late-stage pipeline, which includes several vaccine candidates.
In the oncology space, Moderna's Phase 3 trial for the adjuvant melanoma therapy mRNA-4157, in partnership with Merck, is substantially enrolled. While the FDA has not supported accelerated approval based on current data, Moderna and Merck remain engaged with regulators and focused on executing the Phase 3 trial.
Portfolio Prioritization and Discontinued Programs
As part of its strategic prioritization, Moderna has discontinued five pipeline programs based on data and strategic priorities. These include preclinical and Phase 1 programs for endemic human coronaviruses, RSV in infants, KRAS antigen-specific therapy, a triplet immuno-oncology therapy, and Relaxin.
These decisions reflect Moderna's commitment to focusing its resources on the most promising and commercially viable opportunities, while streamlining its portfolio to align with its long-term goals.
