On Wednesday, Moderna announced a significant boost to its vaccine development efforts with a substantial injection of funds from Blackstone’s life sciences arm, amounting to $750 million. This financial backing comes at a critical juncture for Moderna, as it navigates a sharp decline in sales of its COVID-19 shots and continues to forge ahead with the development of various vaccines, including those targeting cancer and respiratory syncytial virus (RSV). The infusion of capital from Blackstone provides a welcome relief to Moderna’s high research and development (R&D) expenditures, although the company remains committed to maintaining an R&D budget of approximately $4.5 billion for the year.
During Moderna’s 2024 vaccines day event, James Mock, the company’s Chief Financial Officer, expressed optimism about the partnership with Blackstone, highlighting its potential to accelerate new vaccine programs, diversify revenue streams, and mitigate risks associated with the flu program. Under the terms of the agreement, Blackstone Life Sciences stands to receive commercial milestone payments and low-single-digit royalties on the influenza vaccine. Additionally, Moderna has agreed to pay Blackstone a proportional royalty on a combination vaccine targeting both influenza and COVID, contingent upon regulatory approval. Mock also hinted at the possibility of adopting a similar project financing model for other experimental vaccines in the future, underscoring the flexibility and strategic foresight of the partnership.
Looking ahead, Moderna has ambitious plans to advance three vaccines to late-stage trials in the coming year, including vaccines targeting the varicella-zoster virus (shingles) and the pathogen responsible for infectious mononucleosis (mono). Despite experiencing a significant decrease in sales of its COVID shot since its peak in 2022, Moderna continues to incur substantial R&D expenses. In 2023, the company recorded a net loss of $4.7 billion, and while it forecasts $4 billion in COVID shot sales for 2024, it remains committed to driving innovation and expanding its vaccine portfolio.
Moderna also aims to launch its RSV vaccine in the United States this year and is poised to seek regulatory approval for its flu shot, with plans for market entry in 2025. The company sees significant growth potential in both the flu vaccine market, estimated at around $7 billion in 2024, and the RSV shot market, with peak annual sales projected to reach $10 billion.
Late-stage trial data released in September underscored the efficacy of Moderna’s flu shots, demonstrating a stronger immune response against all four A and B strains of the influenza virus compared to traditional flu shots. This promising data further solidifies Moderna’s position in the flu vaccine market and bolsters investor confidence in the company’s long-term growth prospects.