Moderna (NYSE: MRNA) stock plunged Thursday on news it will be slashing its research and development (R&D) budget by about 20% over the next three years, a result of low sales projections and poor vaccine sales.
The Cambridge-based biotech and pharmaceutical company announced it will discontinue five research and development programs in order to cut $1.1 billion from its annual R&D budget by 2027.
“Moderna’s broad clinical success and recent commercial challenges necessitate a more selective and paced approach to its research and development investment,” the company said in a statement on Thursday.
This year’s revenue is projected to be between $2.5 billion and $3.5 billion, down from the company’s prior outlook.
Shares fell 19% at the market’s open, and were down 13% to 17% in midday trading.
Moderna became a hero during the pandemic for its COVID-19 vaccine, Spikevax, but has faced difficulties in its aftermath. In 2020, the company was lauded for using new mRNA-based therapeutics, but it has since disappointed investors with its lack of additional products, with many still in development. It also sells an RSV vaccine, mRESVIA.
Moderna said it currently has five respiratory vaccines in its pipeline, three of which it expects to submit for approval in 2024. Its investigational next-generation COVID-19 vaccine, combination flu/COVID vaccine, and RSV vaccine for high-risk younger adults are moving toward regulatory submissions this year.
Looking ahead, Moderna said it will expand its commercial portfolio with new vaccines and therapeutics to address cancer, rare diseases, and nonrespiratory vaccines.
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