Moderna cuts R&D spending, delays break-even timeline

Moderna announced a significant reduction in its research and development spending, forecasting a decrease from $20 billion to $16 billion for the years 2025 to 2028. This decision comes as the company aims to streamline its expenses by approximately $1.1 billion annually starting in 2027, focusing on prioritizing its portfolio. The announcement led to a sharp decline in the company's shares, which fell by 12% to $69.61 before the market opened on Thursday, reflecting investor concerns over the company's financial outlook. In addition to the spending cuts, Moderna has revised its break-even timeline, now expecting to reach this milestone in 2028, two years later than previously anticipated. The company had initially projected breaking even in 2026, indicating a shift in its financial strategy and operational focus. This delay is likely to raise questions among investors about the company's growth trajectory and profitability. Moderna's revenue forecast for 2025 has also been adjusted, with expectations set between $2.5 billion and $3.5 billion, which falls short of analysts' predictions of $3.87 billion. This discrepancy highlights the challenges the company faces in meeting market expectations amid a competitive landscape in the vaccine development sector. Despite these setbacks, Moderna continues to innovate, having developed the Spikevax COVID-19 vaccine and recently receiving regulatory approval for its RSV vaccine. The company is also working on a combination flu/COVID vaccine, with plans to submit it for regulatory review in 2024. However, the financial adjustments and delayed timelines may impact investor confidence moving forward.