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Moderna (NASDAQ:MRNA) shares were down about 7% in late morning trading after the company posted a profit of $3.61 per share, well below analysts’ estimates of $4.68, according to Refinitiv data.
The U.S. biotech company reaffirmed its 2023 COVID vaccine sales forecast of $5 billion, but said it would need to start making low-single digit royalty payments to one of the NIH divisions.
Moderna also said it had paid a catch-up royalty of around $400 million to the NIH related to a long-standing patent rights dispute over the COVID-19 vaccine, its lone marketed product.
Moderna’s quarterly profit also took a hit from over $950 million in write-downs and charges related to surplus inventory, cancellations and a shift to Omicron-targeting bivalent boosters in many countries.
The company now foresees around $6 billion in expenses this year, including planned investments of $4.5 billion on research and development.
Sales of the vaccine were expected to fall sharply this year from $18.4 billion in 2022 as much global demand for initial shots and boosters has been met, while governments and other agencies cut purchases.
The sales forecast implies a “possible EPS net loss” this year compared to the huge profit its COVID vaccines drove during its peak, Jefferies analyst Michael Yee said in a note.
However, there is a potential for positive cash flow this year if Moderna is able to get more advanced purchase agreements for its COVID shots, Yee said.
Moderna expects additional sales from markets including the United States, Europe and Japan.
Rival Pfizer Inc (NYSE:PFE) had also forecast a bigger-than-expected drop in sales of its COVID-19 products, saying it sees 2023 as a transition year for the products before potentially returning to growth in 2024.
