Moderna (MRNA) faces competitive pressure in several markets as its COVID-19 vaccine share is projected to decline to 40% and uncertainties persist regarding respiratory syncytial virus recommendations and manufacturing plant licensure outside the US, Morgan Stanley said in a note Wednesday.

The company's plans to reduce operating costs to $5.5 billion in 2025 and to $5 billion in 2026 will require scaling back some early-stage programs and improving operational efficiency, according to the note.

Morgan Stanley said Moderna's pipeline progress remains critical and melanoma trial with Merck (MRK) is "likely the most significant opportunity," but developments in cytomegalovirus vaccine are an immediate focus.

Morgan Stanley reduced its revenue expectations for 2030/2035 to $5.5 billion/$7.8 billion from $7.9 billion/$10.9 billion due to lower sales for mRESVIA, SpikeVax and Covid+flu and removal of revenue from phenylketonuria pipeline program.

The brokerage lowered its price target on Moderna's stock to $38 from $70 with an equal-weight rating.

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