Moderna announced it will pause some products in its pipeline as it reduces “annual research and development expense by approximately $1.1 billion starting in 2027.”

With the steep decline in COVID-19 jab sales, the biotech company will prioritize 10 products for potential approval by 2027.

“Moderna now has five respiratory vaccines with positive Phase 3 results and expects to submit three for approval this year. In addition, we have five non-respiratory products in pivotal studies across cancer, rare diseases and latent vaccines with potential for approval by 2027. Our demonstrated probability of success in R&D has been higher than industry standards at every stage of development,” Moderna CEO Stéphane Bancel said.

“The size of our late-stage pipeline combined with the challenge of launching products means we must now focus on delivering these 10 products to patients, slow down the pace of new R&D investment, and build our commercial business,” he added.

“The decision to cut 20% from its R&D budget follows low sales and a disappointing outlook for vaccine revenue, forcing the company to discontinue five key programs,” citizen journalist UngaTheGreat wrote.

“This news has sent Moderna’s stock plummeting, with shares dropping by up to 17% during midday trading. The company plans to tackle cancer and rare diseases as it shifts focus beyond COVID,” he added.

Moderna Slashes R&D by 20% After COVID Vaccine Flop@moderna_tx is slashing its research and development budget by $1.1 billion over the next three years, signaling major troubles for the once-celebrated biotech company.

The decision to cut 20% from its R&D budget follows low… pic.twitter.com/xzlc0KlEZS

— UngaTheGreat (@UngaTheGreat) September 12, 2024

Per CNBC:

The biotech company said it expects 10 new product approvals through 2027. But Moderna said it will also pause work on some products in its pipeline and scrap others, as it aims to “pace ourselves” in new research and development spending.

The company aims to trim R&D spending to a range of $3.6 billion to $3.8 billion in 2027, down from an expected $4.8 billion at the end of this year, according to a release.

“You’re going to start seeing things come down because there are some studies that we are going to basically sunset and we’re not going to start,” Moderna CEO Stephane Bancel told CNBC, adding that the company is putting its latent product portfolio “on hold.” That refers to a category of viruses that linger inside patients for prolonged periods without causing any symptoms but can reactivate and cause serious health complications later in their lives.

Breaking: Moderna will cut its annual R&D spend by $1.1 billion by 2027. $MRNA will focus on 10 near-term launches, stopping development on 5 early stage drugs & effectively pausing others.

More on a major pipeline update & new financial forecasts:https://t.co/D3eMVuCehp

— Andrew Dunn (@AndrewE_Dunn) September 12, 2024

WATCH:

Moderna CEO Stephane Bancel on plans to cut around $1.1 billion in expenses by 2027 and win approvals for several new products as it charts a path forward after the rapid decline of its Covid business.

Read more: https://t.co/WYvIgM5kXd pic.twitter.com/e3WiQnvnpC

— CNBC (@CNBC) September 12, 2024

Axios reports:

Many of its future vaccines aren’t moving quickly enough to bolster the top or bottom line.

The company’s second-quarter revenue totaled $241 million, a 43% drop from a year earlier, which it said was “primarily attributable to decreased sales of the Company’s COVID-19 vaccine.”

The upshot is that Moderna isn’t expected to turn a profit until 2028, according to a research note by Jefferies analyst Michael Yee cited by CNBC.

Moderna’s stock fell over 12% Thursday, having tumbled from its all-time high above $449 in September 2021 — a wipeout of nearly $170 billion of market value over the three years.