Moderna’s CFO on the $25 billion innovation plan to work past the post-COVID slump

Moderna is repositioning itself in the biotechnology space by betting on new innovation based on its mRNA platform. Moderna CFO Jamey Mock will play a major role in mitigating risk in these big investments as demand for the company’s only marketable product at this time—the COVID-19 vaccine—lags. 

Moderna’s total revenue for Q3 2023 was $1.8 billion, compared to $3.4 billion in the same period in 2022, the company reported on Thursday. This is mainly due to a decrease in sales of the COVID-19 vaccine. Net product sales for the third quarter of 2023 were $1.8 billion, a decrease of 44% compared to the same period in 2022. 

The company’s 2023 sales guidance has been revised to at least $6 billion overall (previously $6 to $8 billion), and at least $2 billion from the U.S. (previously $2 to $4 billion).

“After looking through the month of October, it appears as though vaccinations are really following a trend consistent with last year, which would be on the lower end,” Mock says. 

The soft demand for COVID-related products also resulted in a drop in sales for the company’s competitor, Pfizer.

Moderna has taken steps like reducing manufacturing capacity to make sure the COVID franchise is a continuous and increasing source of income and cash generation next year, Mock says. 

But he’s seeing these headwinds as a breeding ground for innovation. 

“There’s a true organic growth opportunity here,” Mock says. “We still believe that we will launch 15 products by 2028.” These will include respiratory, oncology, rare disease and latent disease products, he says.

Among those is the experimental vaccine against respiratory syncytial virus (RSV). Moderna filed with regulators in July for full approval of the one syringe shot for adults ages 60 and older. 

Support for innovation

Moderna plans on investing approximately $25 billion in research and development (R&D) from 2024 through 2028. This is all geared toward long-term value creation for the company, Mock says.

To support innovation and growth, his number one priority is understanding how much the company can afford to spend, Mock says. 

“Our view is that we’re fortunate to have a fair amount of capital right now,” he explains. “At the end of the third quarter, we have $13 billion in cash. In 2024, our sales will go down to what we think is about $4 billion. So we will most likely make a loss in the year 2024 and deplete some of that capital. We actually think that’s the right thing to do. Now, you can’t do it forever.” But the company is committing to break even by the end of 2026, he says.

Another priority is assessing where to spend, he says. For example, Moderna has de-risked infectious disease vaccines due to prior success with COVID, and now with RSV, he says. “So it’s easier to invest there from a probability of success perspective,” Mock says. 

He continues, “We also look at the duration and time to revenue. The way we can innovate more is to actually get more sales to be able to afford more capital to reinvest back in the business.” And then there’s diversification and risk management, he says. “We don’t want to put all of our eggs into a respiratory vaccine basket, that’s why you see us investing in oncology and latent disease and rare disease,” Mock says.

And his third priority is helping with execution, especially in regard to the remaining manufacturing facilities,” Mock says. “So that’s investing in it, making sure that it has a lot of automation, making sure that it’s super efficient. And when these products are ready to be sold, we have a reliable source of supply.” 

He adds, “finance, communications, and HR also need to support our frontline and make sure that we can do that in the most efficient way.”

Have a good weekend.

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Some notable moves this week

Jamie Miller was named EVP and CFO of PayPal (Nasdaq: PYPL), effective Nov. 6. Miller will succeed Gabrielle Rabinovitch, who is currently acting CFO. Miller most recently served as global CFO of EY, having joined to lead the separation and IPO of its strategy, tax, and consulting business. Between June 2021 and January 2023, she served as CFO of Cargill.

Tony Skiadas was promoted to CFO at Verizon Communications, Reuters reported. Skiadas, who has a 27-year tenure at Verizon, had been serving as the interim CFO since March 2023.

Troy Ignelzi was named CFO at Rapport Therapeutics, Inc., a clinical-stage biotechnology company, effective Nov. 1. Ignelzi joins Rapport with nearly two decades of financial leadership experience. Most recently, he was CFO at Karuna Therapeutics. Before Karuna, Ignelzi served as CFO at Juventas Therapeutics and scPharmaceuticals. 

Beth Howe was named EVP and CFO at SiTime Corporation (Nasdaq: SITM), the precision timing company, effective Nov. 8. Art Chadwick has decided to step down as CFO and retire, effective Nov. 7. During her 17 years at HP Inc., Howe held numerous finance roles, most recently serving as HP’s chief audit executive. 

Holly Aglio was named CFO at Marchex, Inc. (Nasdaq: MCHX), a conversation intelligence company. Most recently, Aglio was CFO and a member of the board of directors of NetCentrics and led its 2021 acquisition by Cerberus Capital Management. 

Brian Unruh was named CFO and a member of the executive team at ABBYY, an intelligent automation company. Unruh brings 20 years of experience serving in executive management positions at public and private equity-backed software and platform-as-a-service companies.

Raime Leeby was named CFO at DHI Group, Inc. (NYSE: DHX), a provider of AI-powered career marketplaces. Leeby brings over 23 years of financial experience. Before joining DHI, she served as chief strategy officer and interim CFO at US Med-Equip, a company that provides medical equipment and solutions to hospitals.

Andrew Jackson was appointed CFO at Calidi Biotherapeutics, Inc. (NYSEAM: CLDI), a clinical-stage biotechnology company. Jackson has over 25 years of corporate finance experience. He most recently served as CFO of Eterna Therapeutics Inc. Before that, he served as CFO at Ra Medical Systems for over four years. 

Big deal

E-TRADE from Morgan Stanley has released its monthly sector data on net buys and sells on the platform.

"With the S&P 500 declining for a third-straight month in October, E-TRADE clients shifted somewhat into single stock selection—potentially taking advantage of depressed pricing," Chris Larkin, managing director of trading and investing at E-TRADE from Morgan Stanley, said in an emailed statement. "Amid a relatively strong earnings season, traders concentrated some of their buying in AMZN, as the company beat expectations. And, as geopolitical tensions deepen, we saw traders eye the industrials sector with particular interest in Boeing. On the flip side, no big surprises on the net selling front, as traders unloaded consumer staples with the economy humming along and real estate with interest rates remaining high."

Going deeper

Here are a few Fortune weekend reads:

"Tim Cook keeps giving the same answer about Apple’s generative AI plans, and it’s falling flat with investors" by Rachyl Jones

"Disney is buying Comcast’s stake in streaming service Hulu—but the $8.6 billion price tag is just the beginning and could go much higher," by Christiaan Hetzner

"CEO of Ozempic prescription startup Calibrate steps down as investors eye ‘rapid down-sizing’ of consumer business" by Jessica Mathews

"Starbucks’ CEO reveals 3 secrets in his daily routine that helped him beat executive burnout" by Alexa Mikhail 

Overheard

“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history—a multibillion-dollar scheme designed to make him the king of crypto. But here’s the thing: The cryptocurrency industry might be new, the players like Sam Bankman-Fried might be new, but this kind of fraud, this kind of corruption, is as old as time. And we have no patience for it.”

— U.S. Attorney Damian Williams said at a Thursday night press conference after a 12-person jury found Sam Bankman-Fried guilty of seven counts, which is the culmination of a year-long criminal proceeding following the November 2022 collapse of the crypto exchange FTX, Fortune reported.