Moderna Stock Is Up 700% on Cancer Vaccine Hype. Earnings Reveal That Covid Still Counts.

Moderna raised its full-year revenue outlook on the back a strong third quarter fueled by international demand for its Covid vaccines. (JOSEPH PREZIOSO/AFP via Getty Images)

Key Points

Moderna reports third-quarter revenue of $1.3 billion and a profit of $162 million, beating Wall Street expectations.
The company raises its full-year revenue growth target to a range of 15% to 25%, up from a prior outlook of 10% growth.
Higher international sales of Covid vaccines drive a 29% jump in revenue during the quarter.

Moderna stock has surged eightfold this year on mounting excitement over its experimental cancer vaccine. In reality, the biotech remains largely a Covid-driven story—and as earnings showed, that has been working out just fine.

The Massachusetts-based biotech on Friday posted third-quarter revenue of $1.3 billion, outstripping analysts’ calls for $890.3 million. The period is typically Moderna’s strongest of the year due to the seasonality of respiratory vaccine sales, which continue to dominate its top line.

Defying forecasts for a loss, the company posted a third-quarter profit of $162 million, reversing a $200 million deficit from a year earlier. Earnings came to 38 cents a share, better than Wall Street expectations for a loss of $1.10 a share.

For the full year, Moderna is now targeting 15% to 25% revenue growth, up sharply from a prior outlook of 10% growth. The revenue should be split roughly evenly between the U.S. and international markets, management added.

Shares wavered in premarket trading Friday as an initial rally quickly reversed into a 2.9% drop to $243.40. Heading into the session, Moderna was up nearly 719% this year, far outpacing the broader market.

Covid-linked products predictably did the heavy lifting in the quarter. Higher Covid vaccine sales abroad fueled a 29% jump in revenue. Geographically, the U.S. accounted for $780 million, with international markets contributing the remaining $533 million.

Moderna attributed these gains to the execution of strategic partnerships with governments in the United Kingdom, Canada, and Australia, while also acknowledging as a five-year agreement with a local manufacturer in Mexico for Covid vaccines, a move the company expects to support recurring revenue as well as market expansion.

Investor excitement aside, Moderna’s current-day business continues to center on its respiratory vaccine portfolio. In August, the Food and Drug Administration cleared Moderna’s mRNA-based flu shot, mFlusiva, in adults aged 50 and older, marking the first approval of its kind.

Moderna didn’t break out sales figures for mFlusiva in the latest quarter, noting only that it was targeting a limited U.S. launch for the upcoming flu season, as approval occurred after the annual contracting cycle. The shot was separately cleared by regulators in Canada on Thursday alongside a combination mRNA vaccine for flu and Covid.

Analyst attention as of late has centered on intismeran autogene, the personalized cancer vaccine Moderna is co-developing with Merck . The partners are “working toward regulatory submissions and preparing for a potential commercial launch,” Moderna said Friday.

This reaffirmed pledge comes even after a data leak caused shares to plunge 18% in a single session, narrowly avoiding their worst trading day on record. The expanded Phase 3 results showed intismeran’s efficacy alongside Merck’s blockbuster immunotherapy, Keytruda, in patients who were at high risk of their melanoma returning after it had been surgically removed.

In an interview with Barron’s after the selloff, Moderna CEO Stéphane Bancel said the company was “a bit surprised” by the market reaction, seeing as the data were positive.

“As a business, we focus on science and the patients,” Bancel said, adding that Moderna believes intismeran will work “everywhere Keytruda works” and possibly be as big as the world’s leading cancer drug.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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