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Moderna (NASDAQ:MRNA) accelerates cost cuts, trimming 2026 GAAP operating expenses by up to $500 million as COVID-19 vaccine sales dwindle.
Moderna reported a Q1 net loss of $1 billion, narrower than last year's $1.2 billion deficit, on revenue of $108 million that plunged 35% year-over-year as Spikevax sales fell to $84 million and RSV vaccine mRESVIA added just $2 million.
The company's total operating expenses fell to $1.16 billion from $1.43 billion in Q1 2024, reflecting management's push for efficiency across R&D, SG&A and manufacturing. CEO Stephane Bancel highlighted a 19% reduction in combined R&D and SG&A costs versus last year, driven by project reprioritization and streamlined supply chains, while CFO Jamey Mock noted that cash and investments still stand at a healthy $8.4 billion.
Looking ahead, Moderna now targets 2026 operating costs of $5.4 billion to $5.7 billiondown from its prior $5.9 billion forecastand sees 2027 expenses falling further to $4.7 billion$5 billion, painting a two-year cost-saving of up to $1.7 billion.
The company reiterated full-year 2025 revenue guidance of $1.5 billion to $2.5 billion, with roughly $200 million expected in H1 reflecting the seasonality of respiratory vaccines. Those figures sit below 2024's COVID-fueled peak but underscore Moderna's aim to recast itself as a diversified mRNA powerhouseeven as its flu/COVID combo shot won't hit the market until after Phase 3 flu-efficacy data in 2026.
Moderna is banking on regulatory approvals for mRESVIA in markets including Australia and Switzerland and on its burgeoning oncology pipeline, where a Phase 2 checkpoint program is underway. Yet the delay in its next-generation combo vaccine exemplifies the regulatory and competitive hurdles in the vaccine space.
As COVID shot demand stabilizes at a seasonal cadence, Moderna's aggressive expense cuts and pipeline milestones will determine its path to profitability and shape mRNA sector valuations. Investors will be eyeing Moderna's H2 RSV launch cadence, upcoming Phase 3 oncology readouts and any mid-year update on the flu/COVID combo vaccinekey catalysts for the stock's next leg.
This article first appeared on GuruFocus.