Moderna Trims Pipeline and Takes On $1.5 Billion Loan as Cash Worries Loom

Moderna’s stock is down more than 40% this year and more than 85% over the past three years. (Adam Glanzman/Bloomberg)

Key Points

• Moderna’s stock has fallen more than 40% this year and more than 85% in three years, with analysts expecting a 40% revenue drop in 2025.
• The company’s cash balance, nearly $20 billion in early 2022, is projected to be between $7.1 billion and $7.6 billion by year end.
• Moderna aims to break even by 2028.

Moderna told investors that it still thinks it can stop losing money in 2028, and that its financial outlook remains strong, but that it had taken out a $1.5 billion loan to shore up its balance sheet.

The news came in a mixed bag of investor updates on Thursday that together reinforced the picture of an embattled biotech, scrambling to get ahead of a looming cash crisis.

Moderna said Thursday ahead of a presentation to analysts that it would slash a number of programs in its product-development pipeline, including experimental vaccines for herpes and chicken pox, deepening the cost cuts it has pursued in recent years.

Now, it says its strategy is to build out its existing seasonal vaccine franchise over the next three years, and use the cash from those products to invest in its cancer and rare-disease pipeline.

That represents a decisive shift away from the company’s pandemic-era identity as an upstart vaccine developer. It moves Moderna toward the better-trod path of a biotech focused on cancer and rare diseases.

Moderna has been burning through cash since 2023. It has exhausted much of the hoard of nearly $20 billion it amassed during the peak of the pandemic.

The company’s stock is down more than 40% this year and more than 85% over the past three years. Shares were up 2.4% Thursday.

The dwindling cash balance has been a worry for investors, who fear the company will need to raise new funds by issuing stock, diluting existing shareholders. Now, the company says it will take on a $1.5 billion loan from Ares Management, paid out in three tranches over the coming years.

The funding is nondilutive. “While we remain well-positioned to achieve our 2028 cash breakeven target, this additional capital enhances our strong balance sheet and enables increased flexibility over the coming years,” Jamey Mock, Moderna’s CFO, said in a statement.

With a portion of the new cash from Ares in hand, Moderna said it will now have between $7.1 billion and $7.6 billion left at the end of the year, up from its prior estimate of between $6.5 billion and $7 billion.

Moderna said it now anticipates revenue growth of “up to 10%” in 2026, tied to long-term Covid-19 vaccine deals in the U.K., Canada, and the continuing rollout of a new formulation of its Covid-19 shot in the U.S.

That is a more positive outlook than Wall Street expects. The consensus forecast among analysts tracked by FactSet is for revenue to grow by around 6.5% from 2025 to 2026.

The company also said that it would pursue even deeper cost cuts. It said it expects its cash costs to be approximately $4.2 billion in 2026, down from its prior estimate of $4.7 billion. Its costs for 2027 will be between $3.5 billion and $3.9 billion, down from its prior estimate of $4.2 billion.

Those new savings come from the cuts to the product pipeline. Moderna said it would discontinue development of its herpes simplex virus vaccine, its varicella-Zoster virus vaccine, and its experimental treatment for a genetic disorder called glycogen storage disease type 1a.

In the near term, Moderna continues to anticipate launching a handful of new seasonal vaccines. It said it could be the first to market with a norovirus vaccine in 2028, and the first to market with a combination Covid-19 and influenza vaccine the same year. It plans to launch a standalone mRNA-based influenza vaccine in 2027.

The news for Moderna hasn’t been great thus far this year.

Sales of the company’s Covid-19 vaccine have been in freefall since 2022, when they peaked at $18.4 billion. Sales of the company’s respiratory syncytial virus vaccine, which launched last year, have been negligible. The company said in October that following a trial failure, it was dropping efforts to develop a vaccine designed to prevent birth defects caused by cytomegalovirus. And a continuing study of a norovirus vaccine has faced repeated setbacks.

Those struggles have shifted investor focus onto the company’s cancer pipeline, which includes a closely watched collaboration with Merck on a treatment called mRNA-4157, or intisemeran autogene, which is being tested in a long list of trials in skin cancer and other conditions.

Among the 26 analysts tracked by FactSet who cover the stock, only six rate it Overweight or Buy.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com