Moderna (NASDAQ: MRNA) shares are soaring this week after the company on strong earnings results. This way, Moderna stock is now trading about 20% YTD after gaining more than 60% since the low printed in mid-June.
How Did Moderna Perform in Q2?
The Covid -19 vaccine, which is still Moderna’s only commercially available product, generated $4.5 billion in sales during the second quarter, therefore exceeding analyst estimates. Still, the biotech business suffered a significant loss due to expiring doses.
Sales for the quarter totaled $4.7 billion, up 9% from the same time last year, reaffirming its $21 billion forecast for Covid vaccine sales in 2022. Net income for the corporation was $2.2 billion, a 20% decrease from the same time in 2021.
Q2 report also shows adjusted earnings of $5.24 per share, an 18% decrease compared to 2021 Q2, but still managing to beat the consensus estimate of $4.55 per share.
Moderna suffered a loss of close to $500 million due to expiring doses, adding to the $1.4 billion for cost expenses. In addition, Moderna lost $184 million in contracts to buy vaccines and incurred $131 million in costs for unused manufacturing capacity.
These fees result from significant decreases in anticipated vaccine delivery to Covax, a global alliance that buys vaccines for underdeveloped nations. Deliveries to important clients like the European Union have also been postponed.
“It’s because of COVAX,” Chief Executive Stephane Bancel said in an interview. “COVAX does not want the doses that they have ordered.“
Moderna has $18 billion in cash on hand and announced that $3 billion will be used to repurchase its shares.
In a $1.74 billion deal announced last week, Moderna will supply the United States with 66 million doses of their upgraded Covid vaccine, which targets the omicron BA.4 and BA.5 subvariants. An additional 234 million doses may be purchased under the terms of the arrangement.
Moreover, the company said it is discussing new deals with other countries.
“We do believe the majority of the market demand is captured in this $21 billion. That being said, we continue to work with countries around the world on potential additional orders,” said Chief Commercial Officer Arpa Garay.
Focus on New Variants
Aiming to tackle two Omicron vaccine candidates for the fall, Moderna announced on Monday that one would target the BA.1 variant and the other would target the BA.4 and BA.5.
Updated vaccines are being developed by vaccine producers like Moderna and rival Pfizer to combat the quickly spreading Omicron subvariants BA.4 and BA.5, which have recently expanded to the United States. Bancel added that Moderna is already producing these updated versions and they will be shipped soon.
“There are plenty of countries around the world that would rather start early – as early as August,” Bancel added.
“Some of those countries have said they would rather start with the BA.1 now and then go to BA.4 later versus just waiting and hoping.“
New clinical data for Moderna’s BA.1 variant-targeting mRNA-1273.214 vaccine revealed noticeably greater neutralizing antibody responses against the BA.4 and BA.5 compared with the currently approved booster, the company claimed.
The mRNA 1273.222, the BA.4/5 boosters, are still being developed in compliance with the U.S. Food and Drug Administration (FDA) regulations.
According to Jefferies analyst Michael Yee, the FDA is likely to approve proposed BA.4/5 boosters, since the original 2020 variant already transitioned in the U.S.
Moderna also stated that the new vaccine will also be able to target the original Omicron variant from 2020.
Moderna shares are rising this week on the positive business update from the biotech business.