Moderna announced its decision to scale down the manufacturing of its COVID-19 vaccine on Wednesday. This move comes after U.S. regulators approved an updated version of the vaccine, as the company seeks to align its production with reduced post-pandemic demand and achieve its target of 75% to 80% gross margin growth sooner.
Stephen Hoge, the president of Moderna, stated in an interview that the company is currently in discussions with its global partners responsible for filling vials and syringes with its messenger RNA-based COVID vaccines to reduce production.
The downsizing represents a strategic adjustment to the evolving phase of the disease, which has resulted in a decline in demand for COVID vaccines as payers reduce their orders. In August, Moderna anticipated that U.S. demand for the vaccine would range from 50 to 100 million doses in the fall season, while data from the U.S. The Centers for Disease Control and Prevention reported that healthcare providers administered approximately 153.8 million COVID shots in the United States in 2022.
Hoge noted, “Over the past couple of years, we’ve been in pandemic mode producing a billion doses a year. We’ve been waiting for the moment when the pandemic was officially behind us that we would need to restructure that manufacturing footprint.”
U.S. Food and Drug Administration
Following the U.S. Food and Drug Administration’s authorization on Monday, Moderna announced its plans to commence shipping COVID vaccine doses across the United States. While the company has agreements to supply other countries, such as Britain, Canada, and Japan, there is no agreement with the EU at present. Hoge emphasized that COVID remains the primary focus of Moderna’s manufacturing agreement with China.
Hoge acknowledged that the process of downsizing COVID manufacturing would be ongoing, and discussions with third-party manufacturers, which are expected to help produce upcoming respiratory syncytial virus (RSV) and influenza vaccines, could extend into the next year. He stressed the importance of these long-term partnerships, stating, “These are relationships that we will need for decades to come.”
Moderna did not disclose the names of its partners but has previously mentioned companies such as Thermo Fisher, Sanofi, and Catalent.
Additionally, Moderna reported that it had completed the regulatory submission for its RSV shot and that its flu vaccine had shown a stronger immune response against all four A and B strains of the virus compared to traditional flu shots in a late-stage trial. Moderna’s flu vaccine demonstrated effectiveness across all age groups, including older patients, and experts found it to be safe and well-tolerated. Moderna also noted that its vaccine was equal or superior to Sanofi’s high-dose flu vaccine in a separate early head-to-head study.
As a result of these developments, shares of Moderna saw a nearly 3% increase, reaching $108.50 in premarket trading.