Dive Brief:

• Moderna shares rose by as much as 10% Thursday morning after the COVID-19 vaccine developer reported fourth quarter profit that beat Wall Street expectations of a net loss during the final three months of 2023.

• Full-year sales of $6.7 billion matched estimated numbers Moderna disclosed in January, but were down by about two-thirds versus 2022 as COVID vaccination rates declined substantially last year. The company has restructured its manufacturing operations in response to match the lower demand.

• Moderna forecasts $4 billion in sales this year, with some expected to come from an experimental vaccine for respiratory syncytial virus that’s under regulatory review in the U.S. and several other countries.

Dive Insight:

Both Moderna and its COVID vaccine rival Pfizer were forced to re-calibrate in 2023 as vaccination rates were lower than anticipated.

The $6.7 billion in reported sales, which included $600 million in deferred revenue related to contracts Moderna has with the international vaccine group Gavi, was at the lower end of the company’s previous forecast. The bulk of it, about $4.4 billion, came from sales outside of the U.S.

“2023 was a difficult year,” Moderna CEO Stéphane Bancel said on a prerecorded investor video. “We managed a transition from a pandemic to endemic [market], which there was no playbook for.”

The manufacturing resizing the company undertook last fall was designed to match that new reality, trimming back production capacity to improve the margins for its COVID vaccine business. That effort appears to have led to the net profit Moderna reported in the fourth quarter, which was due to lower cost of goods sold.

With sales forecast to fall lower still in 2024, Moderna is emphasizing its near-to-market RSV shot, as well as other vaccines for influenza and cytomegalovirus that it expects to contribute to the predicted return to growth in 2025 and beyond.

The company is also developing a combination flu and COVID shot that’s meant to be better suited to annual vaccinations in a world in which both viruses drive seasonal spikes in illness.

Expectations are particularly high for the RSV vaccine, which will compete with two shots from GSK and Pfizer that are already on the market in the U.S. Sales of both have been strong, but Moderna argues it can still compete. Its shot is delivered in a single-dose pre-filled syringe that Moderna argues is more convenient for healthcare professionals to administer, for example.

The Food and Drug Administration is set to decide on the vaccine’s approval by mid-May.