By Josh Nathan-Kazis

Moderna had a hoard of $19.3 billion in cash as the Covid-19 vaccine market peaked in early 2022. That cash pile has been getting smaller ever since. The biotech lost $3.6 billion in 2024, and analysts expect the company to lose another $4 billion this year, according to FactSet.

Moderna says its cash on hand will be down to $6 billion by the end of this year, but the company has repeatedly tried to ease Wall Street fears: It is planning a long list of new product launches, and says it will stop losing money in 2028.

Investor worries haven't gone away, namely the fear the company may soon need to raise capital, diluting the holdings of current shareholders.

Shares are down 24% so far in 2025 and down more than 90% from its peak in 2021.

Today, Moderna faces a hostile political environment for its technology, a looming patent problem, and the potential threat of the removal of the company's stock from the S&P 500 index. Those worries have left the stock with a marked tendency toward wild price swings from day to day.

Moderna shares have seen daily moves of 10% or more nine different times over the past 12 months, and 5% or more on 44 different trading days. Chip maker Nvidia, among the most volatile stocks in the S&P 500, has had just three 10%-plus moves and 31 moves of 5% or more over the same period.

The frantic trading comes as Moderna faces a compounding set of challenges.

In late February, Bloomberg reported that the Trump administration was reviewing a $590 million contract Moderna signed with the U.S. Department of Health and Human Services in the last hours of the Biden administration. The funds were intended for a large, late-stage trial of the company's experimental bird flu vaccine.

For now, there's been no formal order to stop work. Moderna told Barron's that it hasn't heard from the government regarding the contract, and has no statement on the reported review.

With vaccine skeptics ascendant in the federal health bureaucracy, however, Moderna's plan to remake vaccines using messenger RNA-based technology looks riskier than ever.

In the month since the Senate confirmed vaccine critic Robert F. Kennedy Jr. to lead HHS, there have been signs of a shift in U.S. vaccine policy, including the cancellation of a meeting of the Food and Drug Administration's vaccines advisory committee, the postponement of a separate meeting of the Centers for Disease Control and Prevention's vaccines advisory committee, and news of a CDC effort to investigate links between vaccines and autism, a bugbear of the antivaccine movement dismissed by the scientific consensus.

Some Republican legislators, meanwhile, have pushed for federal health authorities to pull back approvals for mRNA-based vaccines, and Republicans have introduced legislation in seven state legislatures to limit the use of mRNA-based vaccines, according to a recent report by KFF Health News.

It's a difficult backdrop for a high-cost business that is essentially a pure play on vaccines. The bull case for Moderna rests on the company expanding its line of mRNA-based vaccines, and convincing patients and healthcare providers to switch over from traditional flu shots to new mRNA-based combination shots that protect against both influenza and Covid-19.

Meanwhile, Moderna is enmeshed in a patent battle that could imperil return to profitability.

The case, like all drug patent litigation, is complex, involving claims that a wrapper of fats that protects the mRNA molecule in Moderna's Covid-19 vaccine infringes on a patent held by Arbutus Biopharma, a small biotech. Arbutus and a subsidiary of the biotech Roivant, which had licensed the relevant patents from Arbutus, sued Moderna in 2022. A jury trial is expected this summer.

Leerink Partners analysts David Risinger and Mani Foroohar have written that a trial loss could hit Moderna with damages of between $2.6 billion and $7.9 billion, which they called a "potentially crippling outcome." Jefferies analyst Dennis Ding has laid out a possible range of between $2 billion and $4.5 billion.

It would be a serious blow for Moderna, given the company's dwindling cash hoard. Meanwhile, if the company were forced to pay royalties on future sales of its Covid-19 vaccine, it could take longer for the company to get back to break-even.

As of now, Wall Street expects Moderna to lose $4 billion this year, on $2.1 billion in revenue, according to FactSet. The FactSet consensus estimate currently has Moderna reporting net losses through 2028.

The company has said it doesn't need to raise new cash, and Moderna CEO Stephane Bancel has said he would keep cutting costs if sales fall short. There's likely more room to slash: Moderna plans to spend $4.1 billion on research and development this year. Compare that to the $6.7 billion Wall Street expects in R&D spending from Amgen, a biotech with some 17 times more revenue than Moderna.

Still, if Moderna loses the patent trial, Foroohar sees significant downside. "If you start putting in those assumptions from our analysis, you can very quickly get to a company that belongs at half or less of its current market cap," he says.

Moderna is confident it will prevail. In a statement to Barron's, it said that its technology doesn't infringe on the Arbutus patent, and that it disagrees "with the conclusions reached by certain analysts with respect to our ongoing Arbutus litigations."

The company also said that whatever happens in the jury trial this year, they expect the decision to be appealed, which would push any final resolution off for a number of years. Moderna noted that it's a plaintiff in other active patent litigation. That litigation could result in payouts to the company.

As these clouds gather, Moderna is also facing the threat of removal from an exclusive club: the S&P 500. It joined the index in 2021, when its market value was more than eight times what it is today.

Now, Moderna seems an obvious candidate for removal from the S&P 500. It's one of only three companies in the S&P 500 expected to have a net loss this year.

Moderna declined to comment on its S&P 500 membership.

Removal from the S&P 500 would likely weigh on Moderna shares, as funds tracking the index are forced to sell the stocks. It's yet one more issue on Moderna's growing list of worries.

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

March 26, 2025 15:45 ET (19:45 GMT)

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