By Josh Nathan-Kazis

After Moderna proved in 2021 that messenger RNA vaccines could blunt the impact of a pandemic, it seemed the playbook for future outbreaks was set: A few months of vaccine trials, and then an avalanche of doses that would blanket the globe.

Moderna alone sold 800 million doses of its Covid-19 vaccine in 2021. That recent history has served as a sort of balm in recent months, as the bird flu known as H5N1 has swept through dairy farms and poultry flocks across the U.S., and infected a small but growing number of humans.

But since its Covid-19 success, Moderna has cut costs in the face of weaker demand, falling revenue, and sagging stock. On Monday, shares tumbled 20% after the company's latest vaccine forecast sparked concerns about the company's financial staying power.

If the worst happens, the thinking has been, and H5N1 evolves enough to set off pandemic, Moderna would rush to the rescue with a boatload of doses of an H5N1 vaccine, blunting a potential pandemic's impact.

But Moderna is in a different position than 2020. As Covid-19 vaccine sales have plummeted, and the company's financial outlook has worsened, it has slashed away at its cost base in an effort to stretch out its cash runway. Many of those cuts have come at the expense of the company's manufacturing capacity.

"We've built this big machine for the pandemic to save as many lives as we could," the company's CEO, Stéphane Bancel, told Barron's as he announced a resizing of the company in late 2023. "Now as we move into endemic, the company structure is not adapted for that type of volume."

One looming question is whether today's diminished Moderna could still pump out high volumes of an H5N1 vaccine in an emergency.

On Monday, Moderna CFO Jamey Mock told Barron's it would still be possible, despite the cuts.

Mock said that while the company has cut back significantly on its capacity to put vaccine doses in vials, it still has lots of capacity to make the actual medicine.

"We still have most of the drug substance [manufacturing] capacity to be able to respond quite quickly to a potential pandemic," Mock said.

Mock said that the company is currently selling most of its shots as pre-filled syringes containing a single dose of vaccine, or vials containing a single dose. In the pandemic, it could go back to putting five or 10 doses in a vial.

"So, yes, we have taken down some of our filling, but then you get that multiplier effect when you actually switch from single dose vial or pre-filled syringes to multi-dose vials in a pandemic environment," he said.

In a press release laying out its financial update Monday, Moderna didn't say anything about the status of its mRNA-based bird flu vaccine, which the U.S. Department of Health and Human Services gave the company $176 million last year to develop. The federal government said in June that Moderna would launch a Phase 3 trial of the shot in 2025. The company hasn't provided a recent update on the trial.

A different biotech, Arcturus Therapeutics, said Friday that it had started an early-stage, Phase 1 trial of an mRNA-based H5N1 vaccine. The same federal government agency funding the Moderna shot, the Biomedical Advanced Research and Development Authority, is also funding the Arcturus trial.

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 13, 2025 13:59 ET (18:59 GMT)

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