Moderna Stock Cloese 13% Higher

Moderna's stock experienced a notable surge, closing approximately 13% higher on Thursday, following the unexpected revelation of a quarterly profit for the company.

Despite a substantial decline in sales of its Covid vaccine, which stands as its sole marketable product, Moderna's positive financial outcome was attributed to deferred revenue and cost-cutting measures.

The challenging year for Moderna, alongside other Covid vaccine manufacturers, witnessed a decline in revenue as global reliance on protective shots and treatments diminished amid the ongoing recovery from the pandemic.

Moderna reported a net income of $217 million, or 55 cents per share, for the fourth quarter - a notable contrast to the year-ago period's figures of $1.47 billion, or $3.61 per share.

In the fourth quarter, the biotech company generated sales totaling $2.81 billion, with Covid shot revenue experiencing a 43% drop compared to the same period the previous year.

This decline was primarily attributed to reduced vaccine volume, partially offset by a higher average selling price, according to Moderna.

A noteworthy aspect was the recording of $600 million in deferred revenue related to Moderna's collaboration with Gavi, a global vaccine organization facilitating a widespread shot distribution program.

Despite the significance of this deferred revenue, Moderna's CFO, Jamey Mock, downplayed its impact, stating it was a "nonevent" and not the most meaningful metric for evaluating earnings.

Mock emphasized Moderna's satisfaction with the lower-than-expected cost of sales, citing it as a key factor in surpassing analysts' expectations.

The cost of sales for the fourth quarter amounted to $929 million, contributing to a full-year total of $4.69 billion, which included charges related to scaling back Covid shot manufacturing and write-downs of unused vaccine doses.

While the company had initially projected a $5 billion cost of sales for the year, Mock highlighted the positive impact of increased productivity in the fourth quarter.

The deferred revenue from Gavi was characterized as "pure accounting."

Despite the challenges, Moderna reported full-year Covid vaccine sales of $6.7 billion, with total revenue reaching $18 billion in 2022.

The company anticipates a further decline in vaccine sales in 2024 but remains optimistic, noting that its Covid vaccine secured 48% of the U.S. market share in 2023, up from 37% in 2022.

Moderna reconfirmed its sales guidance for 2024, targeting approximately $4 billion.

This forecast includes revenue from its respiratory syncytial virus (RSV) vaccine, with potential FDA approval expected on May 12.