Moderna Inc. made a pitch to investors this week at its annual R&D day that the unprecedented success of its Covid vaccine wasn’t a one-off, and the company is well on the way to becoming a big biotech contender.
As it evolves, the biggest challenge for Moderna has shifted from proving that its mRNA vaccines and products work to convincing the world that they offer something better than what’s already out there. That’s a tougher sell.
Moderna has built a robust pipeline with impressive speed since it brought its first product, the Covid vaccine, to market in 2020. By 2025, it could have four (and if very lucky, five) new products on the market, with a number of others waiting in the wings. It’s a testament to how much the company has learned since 2020 about where mRNA can be best deployed, how to improve its potency and efficacy, and how to make it at large scale.
“It’s really starting to look like a true platform,” Moderna’s CEO Stéphane Bancel told me earlier this week. “It’s not like one thing is working and five more things are not working.” Since its Covid success, the company has hit the mark in Phase 3 studies in flu and RSV, and is seeing similar promise in oncology and rare disease trials.
But as it moves beyond the near-duopoly with Pfizer in Covid vaccines and into other infectious diseases, Moderna will be facing tough competition. That creates a worry: Can the payoff of its rapid transformation justify the cost? Supporting so many late-stage clinical studies isn’t cheap: Moderna plans to spend about $25 billion on R&D from 2024 through 2028. As Bloomberg Intelligence recently noted, its R&D budget for this year already ranks second among biotech companies, lower only than Gilead.
The fear is that the road to 2025 could be paved in red. While the Covid vaccine allowed Moderna to turn a profit for the first time since its founding in 2010, its ability to maintain that while funding the progression of its late-stage pipeline hinges for now on continuing sales of the vaccine.
But it’s reasonable to ask whether Moderna’s forecasted demand for the latest Covid shots — unwavering at $6 billion to $8 billion — can possibly match reality. Interest has nosedived as people at low risk of dying from the virus wonder whether they really need another shot. Only 17% of people in the US opted for last year’s bivalent booster.
Bancel argues that with the US now operating under a more typical commercial market, vaccine uptake will be higher. When someone goes to their doctor or pharmacist for a flu shot, they will likely also be offered the Covid booster, he said. “I have a hard time thinking that 100 million Americans are going to say, ‘Please protect me from having the flu, but don’t protect me from Covid.’”
Another wrinkle is that this year’s uptake of Covid boosters might not be a great predictor of what next year will look like. While this first commercial season is “a good data point for future volumes,” Moderna’s chief commercial officer Arpa Garay pointed out that CDC’s advisers only weighed in on the boosters this week — uptake could improve when their availability is better synced with the arrival of flu vaccines. Then again, the opposite could be true if Covid recedes further into the background.
And then there’s the question of whether the other vaccines the company is developing can carve out a spot in already competitive markets.
For example, Moderna’s RSV vaccine, expected to be approved in time for the 2024 season, is a year behind the launch of shots from GlaxoSmithKline and Pfizer. And while Moderna came through with positive data for its flu vaccine — a critical recovery from disappointing results this spring with an earlier version of it — offering something as good as what’s already familiar might not be enough.
The company is clearly banking on consumer enthusiasm for a vaccine that combines flu and an updated, shelf-stable version of its Covid, which it believes will be on the market in 2025. The company will offer a peek at how well that combo vaccine is performing in the fourth quarter.
Moderna executives seemed confident that regulators will be willing to approve that combo shot based on the efficacy of its individual components and studies that demonstrate it can elicit the same antibody levels when given together. Bloomberg Intelligence analysts aren’t so sure, noting that kind of evidence may suffice in a pandemic, but that the product is novel enough that regulators may want more robust data.
If infectious diseases pose a challenge because of competition, Moderna’s ambitions in oncology could offer the most upside. Investors are clamoring for information about the next steps for its personalized cancer vaccine, which first grabbed attention last December, when early data from a small, Phase 2 study showed that combining it with Merck’s immunotherapy Keytruda reduced the risk of certain melanomas returning or patient deaths by 44%.
The hope has been those results are good enough for the Food and Drug Administration to grant the drug accelerated approval. And while analysts asked over and over again about a timeline for that filing, Bancel pointed to three milestones critical to getting there: starting the Phase 3 trial in skin cancer (that began this summer), making public longer-term data from the Phase 2 study that kicked off the frenzy (expected later this year), and getting in place manufacturing for the highly personalized treatment (anticipated for next year). “When those three things are true, it’s a good time for filing,” he told me.
Moderna’s steady thrum of positive data on multiple fronts demonstrates the power of the mRNA platform to speed up the development of new products. Now it needs to prove that it can also consistently deliver better, more competitive ones.
