Moderna stock plunges after slashing R&D budget

Shares of Moderna (MRNA) are declining in Thursday's trading session following the company's announcement of significant cuts to its research and development budget. This decision comes as demand for its COVID-19 vaccines continues to wane.

The biotech company plans to reduce its R&D spending by $1.1 billion and scale back its drug pipeline, aiming to release 10 new products in the coming years.

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This post was written by Angel Smith and updated by Melanie Riehl

Video transcript

Moderna is slashing its research budget in a push to reach profitability amid disappointing vaccine sales.

The company plans to trim its R and D spending by 20% starting in 2025 and then after Moderna's pandemic era boom.

Of course, you'll remember diminishing demand for covid shots that has weighed on revenue projections.

Back in August, Moderna cut its full year guidance, citing low vaccine sales and tight composition as well.

Um, they're implementing some portfolio prioritisation these cost efficiencies, as they call them, uh, stop me if you've heard that before to reduce that R and D expense by about $1.1 billion from $4.8 billion.

Uh, in 2024 here, the new range by 2027 3.6 to $3.8 billion is what they're looking for that to come in at.

Yeah, I mean, and And I think when you take into account what the street has wanted to see here from Moderna, they wanted them to cut costs.

They wanted the company to kind of realign going forward, given the fact that they that they have seen some of that weakness here, especially on the heels of what they saw revenue wise coming out of Europe when it comes to weaker than expected performance from their covid vaccine again.

So they're making some of these strategy changes cutting their budget by about 20% over the next three years, looking behind that path to profitability very similar to what we've heard from analysts here over the last couple of quarters.

Jeffries out recently saying that Moderna needed to cut as much as actually a billion dollars in expenses to quote regain investor confidence.

So get a move like that, you could argue, could help regain some of that lost confidence here.

Yes, they say, looking ahead to 2026 and 2028 here, Moderna is going to be expanding its portfolio first in class vaccines, they say therapeutics to address non respiratory diseases including.

And my goodness, this is a a word here.

Science cyto Mega cytomegalovirus, I believe, is what it is.

Uh, neuro vs propionic.

Uh, I'm not even gonna go further.

I thought you're even giving this a shot.

He science they're doing over there