Moderna’s fourth-quarter profit tumbled 70% as COVID-19 vaccine sales fell and the drugmaker caught up on a royalty payment.
Heavy research and development costs also weighed on Moderna as the vaccine developer looks to strengthen an income statement currently dominated by its Spikevax coronavirus preventive shots.
Moderna said Thursday that its cost of sales jumped nearly a billion dollars to $1.9 billion in the final quarter of 2022. That included a $400-million “catch-up” payment to the National Institute of Allergy and Infectious Diseases for a new agreement on future royalty sales of the COVID-19 vaccine.
Moderna scientists and government researchers worked together to develop the COVID-19 vaccine at the start of the pandemic. More than 270 million doses of the original vaccine and boosters have been administered in the United States since regulators granted emergency authorization in late 2020.
The Spikevax vaccine is Moderna’s main source of revenue, outside of grants and money from collaborations. It brought in nearly $4.9 billion in sales in the fourth quarter.
That’s a 73% drop from the final quarter of 2021, when the omicron variant of the virus was spreading rapidly and more people were getting either their initial shots or their first round of boosters.
Research and development expenses also nearly doubled to $1.2 billion for the drugmaker. Moderna’s pipeline of drugs under development includes a potential skin cancer vaccine combination it is working on with Merck.
Researchers are testing how Moderna’s potential vaccine and Merck’s immunotherapy Keytruda work in improving survival before cancer returns in patients who had advanced melanoma surgically removed.
The Food and Drug Administration on Wednesday gave that potential vaccine a “breakthrough therapy” designation, which is intended to speed the development and review of drugs that show signs of being an improvement over established treatments.
Moderna expects to start a late-stage study this year.
Moderna also is one of several drugmakers developing a potential vaccine for RSV, or respiratory syncytial virus. Company officials told analysts Thursday they will submit that vaccine to regulators for approval in the first half of this year.
Overall, the drugmaker’s profit fell to $1.46 billion, or $3.61 per share, in the final quarter of 2022. Total revenue dropped 29% to $5.08 billion.
Analysts expected earnings of $4.60 per share on $5.02 billion in revenue, according to FactSet.
The COVID-19 vaccine brought in more than $18 billion in sales last year for Moderna. The company has about $5 billion in sales contracted for delivery this year. But Moderna officials said they expect additional sales from the United States, Europe and Japan.
In the U.S., COVID-19 vaccines will be sold commercially for the first time later this year when the federal government stops buying the shots.
Moderna told The Wall Street Journal last month that it was considering pricing the vaccine in the range of $110 to $130 per dose.
But company leaders emphasized Thursday that people with insurance will pay nothing out of pocket for the shots, and Moderna has a patient assistance program that will provide the shots for people without coverage or who are underinsured.
Shares of Moderna Inc., based in Cambridge, Massachusetts, dropped more than 7% to $146.42 Thursday. The stock had already fallen 12% so far this year as of Wednesday.
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