Dive Brief:

• Moderna on Thursday said the updated COVID shot it’s preparing ahead of a fall vaccination campaign can neutralize two new coronavirus strains, among them a version known as “Eris,” that are widely circulating in the U.S.

• The data come a clinical trial of a shot Moderna designed to target an earlier variant called XBB. The biotech said that the shot spurred a “significant boost” in neutralizing antibodies against Eris and a second variant, Fornax, that are emerging as the dominant strains in the U.S.

• Moderna and its COVID-19 vaccine rivals Pfizer and Novavax are each preparing to market now shots this fall ahead of an expected surge in infections. The Food and Drug Administration is expected to decide on their use by the end of August, so the updated vaccines can be rolled out alongside annual flu shots.

Dive Insight:

Weeks before the start of the latest fall COVID-19 vaccination campaign, developers are less certain than ever about their prospects. Gone are the bulk U.S. government purchases that promised billions of dollars in annual revenue, leaving investors and analysts questioning the level of demand and vaccine makers contemplating cutbacks.

Pfizer has already warned that cost cuts could occur if sales of its shot and antiviral treatment remain slower than expected through the fall. Leerink Partners analyst Mani Foroohar has speculated that Moderna is a “likely candidate for restructuring and headcount reduction” as well, arguing in an Aug. 7 research note that the company’s “expansive operational footprint” is “unsustainable” without a substantial recovery in COVID vaccine demand.

Moderna, for its part, has expressed confidence in a rebound. Its vaccine has met its projections so far this year, generating about $2.1 billion through the first half of 2023. And on a conference call earlier this month, executives pointed to the fall season to cover the bulk of its remaining financial forecasts.

That belief is tied to a surge in infections and hospitalizations that’s already been detected by epidemiologists and could continue into the fall and winter months. The rise is being driven by the Eris and Fornax variants. Another variant, BA.2.86, is also gaining traction.

Still, even Moderna executives noted the difficulty in predicting vaccine uptake now that the shots have transitioned to the commercial market. Leerink’s Foroohar expressed skepticism in a note Thursday, noting the “significant headwinds in translating this immunological biomarker data to commercial viability, absent a remarkable recovery in total COVID vaccine demand.”

“[W]e see little evidence that underlying demand and margin erosion are easing,” Foroohar wrote.

Moderna is also looking elsewhere to protect against further declining sales. It’s preparing to launch a vaccine for respiratory syncytial virus that would compete with rival shots from Pfizer and GSK. It also has vaccines for flu and and skin cancer in advanced testing, though a launch of the latter could be years away.