How Moderna Went From Pandemic Hero to Vaccine Victim
In the latest setback for Moderna, the Food and Drug Administration on Friday approved its next-generation Covid shot for a narrower population of patients than the company intended. The approval grants use of the vaccine only in older adults and people aged 12 to 64 with health risks.
Moderna is in a precarious position. The company bet big on mRNA, the underlying technology powering its vaccines, to develop shots that could treat or prevent different diseases. But after securing riches from its Covid shot, it failed to diversify its pipeline. That has become detrimental for Moderna as the Trump administration casts a critical eye on the technology and seeks to reshape the regulation, recommendations and development of vaccines.
The Department of Health and Human Services recently canceled a contract worth $766 million that was awarded to Moderna to develop mRNA-based vaccines for pandemic-level influenza including bird flu. The FDA released a new framework for approving Covid vaccines, introducing more stringent rules that require more testing. And Moderna withdrew its application with the FDA for its flu-Covid combo shot, which analysts said could have been because it fell short of the new standards.
The beleaguered company is seeking to cut costs and find a path forward postpandemic. Its shares have fallen about 35% this year because of low demand for the Covid shot and disappointing sales of its respiratory-syncytial-virus vaccine. Moderna's share price, which peaked in 2021 at $484, has dropped to prepandemic levels of about $25.
'It's just a bad time to be in the vaccine business,' said Jared Holz, healthcare strategist at financial firm Mizuho. 'The proclivity that this administration has shown is certainly not in their favor.'
HHS will continue to seek advancements through evidence-based technologies that meet the gold standard of science, a spokeswoman said.
Moderna's troubles underscore just how much the regulatory environment has shifted since Trump's re-election. The new framework for vaccine approval requires new Covid shots for certain children and adults to undergo randomized, controlled trials.
HHS Secretary Robert F. Kennedy Jr., a longtime vaccine skeptic, said recently that certain shots for respiratory diseases including mRNA vaccines have 'never worked.' In mid-May, Kennedy said the Centers for Disease Control and Prevention would no longer recommend that pregnant women and children get Covid-19 vaccines as a matter of routine. The industry is also navigating an FDA that has shed thousands of workers.
While many vaccine makers, including Pfizer, face government headwinds, most are better positioned because they sell more products. Moderna has just three approved vaccines and has been struggling to advance its pipeline, which includes treatments for cancer and rare diseases and vaccines for a herpes virus and Lyme disease.
In withdrawing the approval application for a flu-Covid vaccine, Moderna said it did so after consulting with the FDA, which asked for more flu data, and would resubmit after study results come later this year.
The government contract was awarded during the Biden administration, and the bird-flu shot showed positive results in an early-stage study, Moderna said.
But the government terminated the contract after it concluded that the bird-flu vaccine 'was not scientifically or ethically justifiable,' an HHS spokesman said at the time. 'This is not simply about efficacy—it is about safety, integrity and trust,' he said, adding that mRNA 'remains under-tested.'
A Moderna spokesman said the 'results during the pandemic speak for themselves, including demonstrated efficacy and a safety profile established in over a billion people worldwide.'
Moderna Chief Executive Stephane Bancel said at an investor conference in May that the new administration seems focused on Covid vaccination for people at high risk, a goal he said is a 'net positive' and a large market.
Bancel said in an interview in May that Moderna understands it has the burden of proving the safety and efficacy of its products that are based on a newer technology.
'We have exactly the same goal,' Bancel said. 'We wouldn't want to put on the market a product that is not efficacious, that is not safe.'
Before the pandemic made Moderna a household name, the company had no FDA-approved products. Then, in 2020, the biotech won billions for Covid vaccine development as part of Trump's Operation Warp Speed, which helped support vaccine testing in thousands of people.
Moderna's Covid vaccine went on to be used globally and has been credited with saving millions of lives. The vaccine pushed Moderna's annual sales to nearly $20 billion for two years, and its staff grew to 5,800 people.
Moderna made their next goal treating or preventing certain diseases by doubling down on mRNA technology. But development of new mRNA products has been slow. Some studies for other vaccines haven't yielded the data Moderna hoped for and others hit regulatory setbacks. Moderna's vaccine for RSV has struggled to gain market share against shots from Pfizer and GSK, with underwhelming sales.
Meanwhile, the company didn't use its cash to expand beyond mRNA, leaving it dependent on one technology for growth.
'They built a tank for the war, and now the war is over,' Holz said. 'They don't, in my mind, really have a business anymore.'
Last fall, Moderna said it would cut research costs by 20% and some staff, and trim its pipeline of experimental drugs. It began 2025 by slashing its guidance and pledged another $1 billion in cost cuts.
The company has also continued spending on drug development. It had $8.4 billion on hand as of March 31, down from $9.5 billion three months earlier. Holz said that Moderna must raise money or issue debt, because it is on track to run out of cash in 18 months.
Moderna has said it expects to end the year with about $6 billion in cash and investments, and plans to reduce spending and stop losing money in 2028. Moderna has also said it isn't going to raise more equity.
Moderna's future hinges on whether its vaccines in development pan out, as well as whether there is more uptake of the new Covid shot and potential expansion of its RSV shot. The FDA is set to rule on that expansion in June.
Write to Jared S. Hopkins at jared.hopkins@wsj.com and Peter Loftus at Peter.Loftus@wsj.com
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