Moderna 2024 Shareholder Letter

Dear fellow shareholders,

As we reflect on 2024, it is clear that the past year brought formidable challenges for Moderna along with significant advances, particularly for our development pipeline. It was a year of navigating a dynamic global landscape and evolving commercial realities, demanding resilience, innovation and adaptability.

The shifting dynamics of the COVID and RSV vaccine markets tested our commercial strategies and required us to reassess our financial framework. These challenges underscored the complexities of operating in a post-pandemic world and highlighted the need to remain agile within a rapidly evolving healthcare ecosystem.

Additionally, the impending transition within the U.S. government has introduced uncertainty regarding policies and priorities shaping our industry. Yet, amidst these challenges, our unwavering commitment to our Mission to deliver the greatest possible impact to people through mRNA medicines has served as our guiding force.

As you know, Moderna was established with the goal of using mRNA, an information molecule, to treat and prevent disease for people around the world. In a relatively short time, we have developed a large number of innovative medicines, advancing our Mission and growing our portfolio to two approved medicines, seven candidates in Phase 3 trials and a total of 45 programs in our development pipeline.

Our success in research and development is a testament to our platform. With a demonstrated probability of success for our mid- and late-stage pipeline standing at approximately 69 percent compared to the historical industry average of approximately 19 percent, we are redefining what is possible in biopharmaceutical innovation. As we demonstrate the higher success rates of our development candidates, we believe the value ascribed to our broader pipeline based on higher expected probabilities of success may increase correspondingly.

Despite the challenges in 2024, we became a multi-product company with the approval of mRESVIA®, our RSV vaccine for older adults. With the launch of our updated COVID-19 and RSV vaccines, Moderna is now the only company with more than one approved mRNA product. We also achieved four positive Phase 3 data readouts across our respiratory portfolio, further demonstrating our platform’s potential to address significant unmet medical needs and advance public health.

Beyond our respiratory portfolio, we prioritized the advancement of five non-respiratory programs, with milestones including the initiation of a Phase 3 study of our norovirus vaccine, a positive readout of three-year data from the Phase 2b trial of our individualized neoantigen therapy (INT), as well as the start of our third Phase 3 trial for INT in partnership with Merck. We also took steps to move two of our rare disease therapeutic programs toward registrational trials.

While we are encouraged by this progress, we recognize opportunities for improvement. With a continuous learning mindset, we analyzed these outcomes and adapted our business strategy based on our successes and challenges. We are confident that with our industry-leading mRNA platform, technology, resources and team, we are well-positioned to execute this strategy and continue building a future where Moderna leads in healthcare innovation, delivering on our Mission for patients in 2025 and beyond.

A Year of Discipline and Focus

In 2024, we set out with a focus on commercial execution, disciplined investment and the advancement of our late-stage pipeline to drive organic sales growth. Throughout the year, we exercised financial discipline and intensified our focus on building and rebuilding efficiently and utilizing technology to further streamline operations to enhance productivity across our business after having built so rapidly during the pandemic.

In our second full year of commercialization, our share of the COVID vaccine market declined due to increased commercial competition. Despite all our efforts, the U.S. market volume did not grow. Both were disappointing outcomes, and we are adapting our strategy for 2025.

Outside the U.S., our results were mixed, with stronger performance in some markets, offset by weaker performance in others. We also faced continued exclusion from many European markets by a pandemic-era competitor contract with the European Commission.

There are positive signs going into 2025. The market volume for COVID vaccines has been relatively stable for two years, and public health recommendations for vaccinations are normalizing. We are encouraged to see the emergence of a sizable and durable long-term COVID vaccine market.

At the same time, we recognize there is more work to do given the significant health risks posed by COVID. Vaccination remains critical in preventing severe outcomes, mitigating Long COVID and protecting communities, especially as U.S. Centers for Disease Control and Prevention (CDC) data highlight that adults over 65 are at least three times more likely to be hospitalized due to COVID than the flu.¹ Notably, more than 95 percent of adults hospitalized in 2023-2024 for COVID had not received the latest vaccine.²

This past respiratory season, we also launched mRESVIA, which marked our second approved product in the market, building on the strength and versatility of our mRNA platform. We and others did not anticipate the updated CDC Advisory Committee on Immunization Practices (ACIP) guidance, and the resulting contraction in the U.S. market. We were also too optimistic about our ability to break into the market given the headwinds from a midyear approval and launch. We are taking those learnings to heart and going forward, we will not include revenue from products in their launch year in our financial framework.

With regard to disciplined investment, we built upon the rightsizing of our manufacturing infrastructure in 2023—in line with the resizing of the COVID-19 vaccine market due to the shift from a pandemic to an endemic market—by driving internal cost control and productivity starting in early 2024. By the end of 2024, we reduced our cash operating cost by nearly 25 percent compared to the prior year. We also announced our expectation to continuously reduce annual research and development costs, through portfolio prioritization and cost efficiencies, such that by 2027 we will plan to spend approximately $1.1 billion less per year compared to 2024.

In 2024, strategic investments in people, processes and technologies further enhanced our capabilities. We welcomed to our Board of Directors David Rubenstein and Abbas Hussain, who bring tremendous international policy experience and global commercial operational expertise.

Expanding our Executive Committee, we promoted Dr. Jacqueline Miller to Chief Medical Officer and Dr. Rose Loughlin to Executive Vice President of Research. We expanded the responsibilities of two current members with Dr. Stephen Hoge, President of Moderna, overseeing strategy for the full product lifecycle from Research and Development through Medical Affairs and Commercial and Tracey Franklin, Chief Human Resources Officer, becoming our Chief People and Digital Technology Officer, emphasizing the profound ways in which AI and digital platforms will reshape our ways of working and deliver on our Mission.

To create efficiency in how we work, we entered into a collaboration with OpenAI. Both of our companies are research-driven organizations pushing the boundaries of technology to drive transformation, and collaborations with companies like OpenAI are critical to our ability to scale effectively and maximize our impact on patients.

Importantly, we invested in the learning and development of our team, the engine that drives our science and our culture. As a positive reflection on our people and culture, Moderna was recognized for the tenth consecutive year by Science Careers as a Top Employer. Additionally, Moderna joined the ranks of Fortune's World's Most Admired Companies for the first time, reflecting our transformative platform and commitment to advancing mRNA medicines while fostering an environment where people can do their best work.

The Moderna team has made great strides to advance our late-stage pipeline. Over the past three years, our robust pipeline has achieved milestones across multiple late-stage clinical trials, and our early-stage portfolio has produced proof-of-concept data with multiple candidates ready for pivotal studies.

In 2024, we understood that our broad clinical success and recent commercial challenges necessitated a more selective and paced approach to our research and development investment. Indeed, our research and development investments through 2027 will potentially yield up to 10 product approvals over the next three years, expanding our commercial portfolio into oncology, rare diseases and first-in-class non-respiratory vaccines. We are prepared to make these investments in our pipeline without needing additional capital infusion.

We recognize our platform’s productivity needs to be turned into greater commercial success. Understanding the hard work that lies ahead, we are pacing ourselves. In addition to focusing on these 10 approvals, we are going to ensure we do not advance further latent vaccines or rare programs into pivotal development until we have shown we are better prepared to effectively launch these products into global markets either directly or through strategic partners. That is how we will best deliver on our commitment to patients.

Advancing mRNA Medicines

At our annual R&D Day in September, we announced our focus on delivering 10 new product approvals over the next three years. The following highlights a few notable 2024 milestones from across this prioritized research and development portfolio.

Respiratory Franchise

In 2024, we announced four positive Phase 3 data readouts across our respiratory disease programs, including our next-generation COVID, RSV for high-risk adults aged 18 to 59, combination flu/COVID, and seasonal flu vaccine candidates. Using a priority review voucher, we proceeded to file for approval of our investigational next-generation COVID vaccine, mRNA-1283, and received a PDUFA date of May 31, 2025, from the U.S. FDA. In addition, we initiated a Phase 3 efficacy study, funded by Blackstone Life Sciences, for our seasonal flu vaccine candidate, which has demonstrated consistently acceptable safety and tolerability across three previous Phase 3 trials.

Latent & Other Franchise

We prioritized the development of vaccines against two latent and other viruses with unmet or underserved needs: cytomegalovirus (CMV) and norovirus. The pivotal Phase 3 study of our CMV vaccine candidate for the prevention of primary infection in women of childbearing age is ongoing. We will share an update when we receive the efficacy data from the independent Data Safety Monitoring Board.

Our trivalent vaccine candidate for the prevention of norovirus advanced into a pivotal Phase 3 clinical trial evaluating its efficacy, safety and immunogenicity. Norovirus is a significant public health concern that affects millions of people worldwide each year, leading to severe symptoms and, in some cases, hospitalization. By advancing our investigational norovirus vaccine into a Phase 3 study, we are one step closer to potentially providing a new tool to prevent infection from this highly contagious enteric virus, which places a significant burden on health systems globally.

Oncology Franchise

In 2024, we announced three-year data from the Phase 2b trial evaluating INT in combination with Merck’s KEYTRUDA® in patients with resected high-risk melanoma. The therapy continued to show a sustained benefit in recurrence-free survival and reduced the risk of recurrence or death by 49 percent and the risk of distant metastasis or death by 62 percent compared to KEYTRUDA alone. These data reinforced our commitment to advancing this innovative treatment in collaboration with Merck and to transforming cancer therapy for patients.

We were excited to see the continued and durable clinical benefit with our mRNA therapy, and to launch a new Phase 3 study with Merck evaluating adjuvant INT in combination with KEYTRUDA after neoadjuvant KEYTRUDA and chemotherapy in patients with certain types of resected non-small cell lung cancer. This is the third Phase 3 trial for the investigational INT focused on earlier stages of cancer. To support this continued progress, we have advanced the build out of our factory in Marlborough, Massachusetts, which will enable the commercial launch for INT.

Rare Disease Franchise

Our rare disease portfolio continued to show promising advancements this year as well. In an ongoing Phase 1/2 study designed to evaluate safety and pharmacology in trial participants with propionic acidemia (PA), our investigational therapeutic was generally well-tolerated to date with no events meeting protocol-defined dose-limiting toxicity criteria. Early results suggest potential decreases in annualized metabolic decompensation event frequency compared to pre-treatment, and the majority of PA patients have elected to continue on the open label extension study. The study began generating data supportive of registration activities in 2024.

Additionally, our investigational therapeutic for methylmalonic acidemia was selected by the U.S. FDA for the Support for Clinical Trials Advancing Rare Disease Therapeutics (START) pilot program in 2024. The FDA and Moderna have agreed on the pivotal study design, and we expect to start the study in the first half of 2025.

Acting Responsibly

As we continue to make progress in our platform and increase our potential to profoundly impact human health, we recognize that building the most impactful version of Moderna requires maintaining trust with stakeholders, protecting the health of the planet and caring deeply for our employees and communities. By meeting at the intersection of science and responsibility, I know that we can meaningfully improve the lives of patients.

In June, we published our third annual ESG Report, a milestone that underscores our commitment to transparency, stakeholder engagement and integrating ESG priorities into the heart of our operations. The report highlights significant milestones, including the positive impact on more than 100 million lives through mRNA medicines and our partnership with the Coalition for Epidemic Preparedness Innovations (CEPI) to enhance pandemic preparedness. Our mRNA Access program now includes 18 institutions, and we have achieved 38 percent Global Ethnic Majority enrollment in U.S. infectious disease trials. Looking ahead, we are committed to net-zero carbon emissions (Scopes 1 & 2 by 2030, Scope 3 by 2045), fostering inclusion and diversity, sustainable site designs, and deepening community engagement to address inequality.

Looking Ahead

In 2025, we are focusing on three priorities. Priority one is to drive sales of our Spikevax® and mRESVIA vaccines, which are the foundation of our respiratory portfolio. We will continue to work with all market channels to maximize the availability of Spikevax. Internationally, we plan to bring manufacturing plants online in the UK, Canada and Australia in 2025. Additionally, with a full season of RSV contracting in 2025, we expect to increase mRESVIA’s market share in the U.S. and market access globally.

Priority two is to focus on delivering up to 10 product approvals over the next three years to drive sales growth and fund the next wave of research and development investment. For eight of these programs, we have near-term milestones, including the potential approval of our RSV vaccine candidate for high-risk adults aged 18 to 49.

Priority three is to continue improving efficiency by keeping our R&D and SG&A expenses flat to down in 2025. By 2027, we expect to decrease annual R&D expense by $1.1 billion compared to 2024. On the cost of sales, we will continue to drive efficiency through manufacturing productivity improvements to achieve operating leverage.

In closing, we have the largest late-stage pipeline of mRNA medicines in the world, and we will continue to focus on positively impacting human health. While there is work to be done to meet our execution targets and build our commercial capabilities, I am confident that our team will continue to work relentlessly to achieve our goals.

I am deeply thankful for everything the Moderna team does to advance our Mission. We will remain focused on creating an environment where our employees can have meaningful careers, and where purpose and innovation fuel our work.

Thank you to all our shareholders for your continued trust and support in our development and delivery of medicines of the highest quality. I continue to be excited about the potential we have to deliver for patients.

The actions we are taking will help us fully realize our vision. Our bright future is in mRNA medicines.

Warmest regards,
Stéphane Bancel

Chief Executive Officer

Download the 2024 Moderna Shareholder Letter as a PDF.

¹https://www.cdc.gov/resp-net/dashboard/
²https://www.cdc.gov/respiratory-viruses/risk-factors/older-adults.html