Moderna sees up to $8 billion in 2023 COVID vaccine sales on private market hopes

By Leroy Leo and Patrick Wingrove

(Reuters) – Moderna (NASDAQ:) Inc on Thursday raised its annual forecast for COVID-19 vaccine revenue to up to $8 billion in anticipation of a boost in the fall season, as sales move to the private market in the United States from government contracts.

COVID vaccine makers Moderna and Pfizer (NYSE:) are expecting private market sales and strong demand for their new updated shots targeting XBB.1.5 variant to turn around a slump in demand after a surge during the peak of the pandemic.

Moderna expects $6 billion to $8 billion in sales from its COVID shots this year, up from its previous forecast of $5 billion.

It forecast U.S. demand at 50 to 100 million doses in the fall season, adding a low-end and range to its previous expectation of 100 million doses.

“In this first transition year to a commercial endemic market, it is difficult to accurately predict market volumes and predict how many Americans will come in this fall for their shots,” Chief Commercial Officer Arpa Garay said in an investor conference call.

The company sees between $2 billion and $4 billion in vaccine sales from commercial contracts in the United States and other countries. However, it said $1 billion of a total $5 billion in sales from signed government contracts would be deferred to next year.

“We are not totally surprised, and this points to the idea (that) countries seem to be able to have contracts but then decide they either want or don’t want deliveries based on COVID dynamics,” Jefferies analyst Michael Yee said in a note.

Shares of Moderna were up 2% in morning trading.The company said it has finalized a contract with the Japan government for supply of vaccines for the 2023 vaccination season.

Pfizer on Tuesday warned that sales of COVID vaccines were uncertain, adding that the COVID vaccination rates this fall should be a good predictor for annual rates. Sales of Pfizer’s COVID-19 vaccine fell 83% in the second quarter.

For Moderna, COVID vaccine sales slumped 94% to $293 million in the second quarter, which was still higher than analysts’ average estimate of $233.6 million, according to Refinitiv data.

It reported a net loss of $3.62 per share, narrower than analysts’ average estimate of a $4.04 loss.

Moderna’s quarterly financials were hurt by inventory writedowns and other charges worth $674 million, driven by a shift in product demand to the updated COVID shot as well as a decline in customer demand.