Moderna struggles with challenges: Analyst update worries shareholders

The stock prices of the biotech firm Moderna are currently experiencing a decline after the company postponed its profit forecast by two years and predicted revenue for 2025 below the current annual forecast. Moderna also delayed the development timeline for key products, causing the stock prices to fall to a nearly four-year low. Michael Yee, biotech analyst at Jefferies, commented on Market Domination about the downgrade of Moderna to "Hold" and the future of the company in a highly competitive sector. Yee cites various factors that led to his downgrade. The company lowered its forecasts for the year 2024 in the COVID and RSV segments, with RSV sales significantly falling short of expectations. Furthermore, Yee expressed disappointment over the delay in the break-even point and raised doubts about the new timeline. He warned of significant cash outflows and a potential capital increase. Yee explained: "On one hand, they will burn a significant amount of cash. We see the risk of a necessary capital increase... On the other hand, there are concerns regarding some forecasts related to the pipeline." However, Yee emphasized that Moderna's mRNA technology is considered effective, although the company operates in a "very competitive environment." He criticized that the company's expenses do not match the revenues and that Moderna is "burning too much money," necessitating adjustments for the post-COVID era. Nonetheless, Yee refrained from downgrading Moderna to "Sell" as a "significant decline" in the stock price had already been priced in. "Our outlook is more focused on the next 12 months, where we expect further issues. Additionally, there is potential for the CMV vaccine, which could present positive Phase 3 data," added Yee, highlighting structural concerns in the mid-term. For deeper insights and current market actions, click here to watch the full episode of Market Domination.