Moderna(US:MRNA)2025-08-01 20:03PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The company reported a net loss of $825 million in Q2 2025, an improvement from Q2 2024, with total assets decreasing to $12.0 billion due to cash used in operations Condensed Consolidated Balance Sheets Total assets decreased to $12.01 billion by June 30, 2025, from $14.14 billion, driven by reduced cash and investments, with equity declining to $9.40 billion Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $12,010 | $14,142 | | Cash and cash equivalents | $1,279 | $1,927 | | Total investments | $6,226 | $7,592 | | Total Liabilities | $2,611 | $3,241 | | Total current liabilities | $1,572 | $2,206 | | Total Stockholders' Equity | $9,399 | $10,901 | | Retained earnings | $8,249 | $10,045 | Condensed Consolidated Statements of Operations Q2 2025 total revenue decreased 41% to $142 million, resulting in a net loss of $825 million, which narrowed from Q2 2024 due to a 43% reduction in R&D expenses Statement of Operations Summary (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $142 | $241 | $250 | $408 | | Research and development | $700 | $1,221 | $1,556 | $2,284 | | Total operating expenses | $1,049 | $1,604 | $2,207 | $3,037 | | Loss from operations | $(907) | $(1,363) | $(1,957) | $(2,629) | | Net loss | $(825) | $(1,279) | $(1,796) | $(2,454) | | Net loss per share (basic and diluted) | $(2.13) | $(3.33) | $(4.64) | $(6.41) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities for H1 2025 was $1.96 billion, an improvement from 2024, with investing activities providing $1.29 billion, resulting in a $648 million decrease in cash Cash Flow Summary for Six Months Ended June 30 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,956) | $(2,263) | | Net cash provided by investing activities | $1,294 | $1,767 | | Net cash provided by financing activities | $13 | $48 | | Net decrease in cash, cash equivalents and restricted cash | $(648) | $(448) | Notes to Condensed Consolidated Financial Statements Notes detail business, accounting policies, and financial components, highlighting three commercial products, declining sales, key collaborations, increased inventory write-downs, and patent litigation - The company has three commercial products: Spikevax (original COVID vaccine), mRESVIA (RSV vaccine), and mNEXSPIKE (next-gen COVID vaccine) It has a pipeline of 30 development candidates across 39 programs30 Net Product Sales by Product (in millions) | Product | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | COVID | $114 | $184 | $198 | $351 | | RSV | $— | $— | $2 | $— | | Total | $114 | $184 | $200 | $351 | - A development and commercialization funding arrangement with Blackstone for the mRNA-based influenza vaccine program resulted in a reduction of R&D expenses by $160 million and $250 million for the three and six months ended June 30, 2025, respectively5556 - Inventory write-downs increased to $38 million in Q2 2025 and $80 million in H1 2025, compared to $14 million and $44 million in the respective prior-year periods, mainly due to excess demand forecasts and shelf-life expiration64 - The company is involved in significant patent-infringement litigation with multiple parties, including Pfizer/BioNTech, Arbutus, Alnylam, and GSK848586 - As of June 30, 2025, $1.7 billion remains under the board's authorization for share repurchases No shares were repurchased during the first six months of 2025100 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 41% Q2 2025 revenue decline due to lower COVID vaccine sales, with net loss narrowing from reduced R&D and SG&A expenses, and highlights key regulatory approvals and sufficient liquidity Business Highlights and Recent Program Developments Moderna achieved key regulatory milestones with FDA approvals for mNEXSPIKE and expanded mRESVIA, reported positive Phase 3 flu vaccine results, and advanced CMV, Norovirus, and oncology programs - In May 2025, the FDA approved mNEXSPIKE (mRNA-1283), the company's next-generation COVID-19 vaccine, for individuals 12 and older at risk, based on a Phase 3 study showing non-inferiority and higher relative efficacy compared to Spikevax109 - In June 2025, the FDA expanded the approval of mRESVIA, the RSV vaccine, to include adults aged 18-59 at increased risk, building on the initial approval for adults 60 and older110 - The seasonal flu vaccine candidate (mRNA-1010) achieved its primary superiority endpoint in a Phase 3 study, showing 26.6% relative vaccine efficacy compared to a licensed standard-dose vaccine The company is preparing for FDA submission115 - The pivotal Phase 3 study for the CMV vaccine candidate (mRNA-1647) is fully enrolled with a final analysis anticipated in 2025115 Results of Operations Analysis Q2 2025 total revenue decreased 41% to $142 million due to lower product sales, while cost of sales rose to 105%, and operating expenses significantly reduced with R&D down 43% Q2 2025 vs Q2 2024 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Net product sales | $114 | $184 | $(70) | (38)% | | Total revenue | $142 | $241 | $(99) | (41)% | | Cost of sales | $119 | $115 | $4 | 3% | | Research and development | $700 | $1,221 | $(521) | (43)% | | Selling, general and administrative | $230 | $268 | $(38) | (14)% | | Net loss | $(825) | $(1,279) | $454 | 35% | - The decrease in Q2 and H1 2025 revenue was largely due to lower sales volume and a lower average selling price for the COVID vaccine in the U.S. market126127 - Cost of sales as a percentage of net product sales increased to 105% in Q2 2025, compared to 62% in Q2 2024, primarily due to the impact of lower net product sales against largely fixed manufacturing costs130 - The 43% decrease in Q2 2025 R&D expenses was driven by lower clinical manufacturing and trial expenses, investment reprioritization, and a $62 million benefit from the Blackstone funding arrangement132 Liquidity and Capital Resources As of June 30, 2025, Moderna held $7.5 billion in cash and investments, a $2.0 billion decrease from December 2024, primarily due to operating cash outflow, but believes it has sufficient funding for 12 months Financial Position (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,279 | $1,927 | | Total Investments | $6,226 | $7,592 | | Total Cash & Investments | $7,505 | $9,519 | | Working Capital | $4,599 | $5,893 | - Net cash used in operating activities for the first six months of 2025 was $2.0 billion, driven by a net loss of $1.8 billion and changes in working capital147 - The company believes its cash, cash equivalents, and investments as of June 30, 2025, will be sufficient to fund operations and capital expenditures for at least the next 12 months155 Item 3. Quantitative and Qualitative Disclosures about Market Risk No material changes occurred in the company's market risks or their management during the first six months of 2025 compared to the 2024 Form 10-K disclosure - There have been no material changes to the company's market risk or its management of such risks for the three and six months ended June 30, 2025158 Item 4. Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level159 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting160 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company provides updates on ongoing patent litigation, including the Arbutus trial rescheduled to March 2026, new GSK lawsuits, and a favorable appeal decision with Alnylam - The patent infringement trial with Arbutus Biopharma and Genevant Sciences has been rescheduled to begin on March 9, 2026164 - In July 2025, GlaxoSmithKline (GSK) filed two new patent infringement lawsuits against Moderna in the Unified Patent Court (UPC) related to liposomes for RNA delivery, seeking monetary and injunctive relief165 - In a case with Alnylam Pharmaceuticals, the Federal Circuit Court of Appeals decided an appeal in Moderna's favor on June 4, 2025, regarding a judgment of non-infringement166 Item 1A. Risk Factors No material changes occurred in the company's risk factors compared to those previously disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes from the risk factors previously disclosed in the 2024 Form 10-K167 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No shares were repurchased during Q2 2025, with $1.7 billion remaining under the board's share repurchase authorization, which has no expiration date - No shares were repurchased during the three months ended June 30, 2025168 - As of June 30, 2025, $1.7 billion of the Board's authorization for share repurchases remains outstanding with no expiration date168 Item 5. Other Information No directors or officers adopted or terminated a Rule 10b5-1 trading plan or other non-Rule 10b5-1 trading arrangement during the fiscal quarter - No directors or officers adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement during the quarter170 Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q, including officer certifications and XBRL data files