Moderna, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Thank you, Kevin.

Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's second quarter 2026 financial results and business update. You can access the press release issued this morning, as well as the slides that we will be reviewing by going to the investors section of our website. On today's call are Stéphane Bancel, our Chief Executive Officer, Stephen Hoge, our President, Jamey Mock, our Chief Financial Officer, and David Berman, our Chief Development Officer. Before we begin, please note that this conference call will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see slide two of the accompanying presentation in our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements.

With that, I will now turn the call over to Stéphane.

Thank you, Lavina. Good morning or good afternoon, everyone. Thank you for joining us. After my review of the second quarter, Jamey will present our financial results and outlook, followed by Stephen with recent business updates. David will review our clinical progress in oncology and rare diseases. Then I will close by discussing our key value drivers. As you know, the second quarter is always light for seasonal vaccines. We generated revenue of $0.1 billion, which exceeded the top of our range. Our focus on financial discipline continued. We reduced cash cost by 10% in Q2 compared to the second quarter of 2025. We reported a net loss of $0.8 billion. We ended the quarter with $6.9 billion in cash and investments, maintaining a strong balance sheet while continuing to invest in our pipeline. Overall, I am pleased with our continued execution across the business.

This team has done a great job to get us ready for the 2026, 2027 vaccination season, and our pipeline is progressing well. During the quarter, we delivered several important updates across our pipeline. In our respiratory portfolio, our seasonal flu vaccine, mRNA-1010, received a positive recommendation from the U.S. VRBPAC. This represents another important milestone ahead of our August 5th PDUFA date and brings us one step closer to potentially making our flu vaccine available to patients. For our norovirus vaccine, mRNA-1403, following an interim analysis, we are preparing to enroll an additional cohort in its phase III trial. In oncology, we are very pleased to present the five-year phase II update of intismeran autogene in combination with KEYTRUDA in adjuvant melanoma at ASCO 2026, highlighting the continued durability of the clinical benefit observed of this program.

We also presented important translation data that provides additional confidence in the mechanism of action of our individualized neoantigen therapy. Finally, we're excited to announce that dosing has begun in two cancer antigen therapy programs, the phase I/II study of mRNA-4194 in Lynch syndrome and the phase I study of mRNA-4200 in solid tumors. Beyond our pipeline, we also had several notable corporate achievements during the quarter. We are pleased to expand our partnership with CEPI to explore the development of an Ebola vaccine, reinforcing our longstanding commitment to global health security and pandemic preparedness. We're also honored to be named the world's most impactful company by "Time" magazine, recognizing our pioneering work in mRNA science. This recognition reflects both the global impact we made during the pandemic and our continued effort to advance a broad pipeline of innovative medicine and expand access to mRNA technology worldwide.

Turning now to our leadership team, I'd like to highlight two important appointments we announced this quarter. As we continue to strengthen Moderna for the next phase of growth, I'm very pleased to welcome Ester Banque as our new Chief Commercial Officer. Ester joins us with more than 30 years of commercial leadership experience and an outstanding track record of leading high-performing organizations across the healthcare industry. More recently, she led U.S. operation at Zoetis, and before that, held several commercial leadership roles at BMS and Novartis, where she helped bring important medicines to patients around the world. Ester now leads our global commercial organization as we prepare for multiple launches and continue expanding into new markets. We are delighted to have Ester join Moderna and have been enjoying working closely with her. I am also pleased to welcome Michael McDonnell to Moderna's board of directors.

Michael is familiar to many of you, as most recently, he served Executive Vice President and Chief Financial Officer of Biogen. Michael brings more than two decades of public company CFO experience and deep expertise across finance, capital markets, investor relations, and corporate governance. His experience across the life science and technology sectors will be a valuable addition to our board as we continue to execute our strategy and create long-term value. We are delighted to welcome Michael to Moderna's board. With that, I will now turn to Jamey.

Thanks, Stefan, Hello everyone. Today, I'll start with our second quarter financial results and then review our updated financial framework for 2026. Let me start with our commercial performance. For the second quarter, total revenue was $145 million, above the guidance range we provided on the first quarter call. Our geographic mix for the quarter was 60% U.S. and 40% international. For the first half of the year, total revenue was $0.5 billion, with 31% from the U.S. and 69% from international markets. Our long-term strategic partnerships drove the strong international contribution during the first half. Overall, we are pleased with our first half performance and are reiterating our expectation for revenue growth of up to 10% in 2026.

We continue to expect a roughly 50/50 split between U.S. and international revenue for the full year, and we expect third quarter revenue will represent approximately 55% of our second half revenue. Now let me turn to our second quarter financial performance on slide 10. As I just mentioned, revenue was $145 million in the quarter, up 2% from the prior year. Cost of sales for the quarter was $93 million, a 22% decrease compared to the prior year, primarily driven by lower unutilized manufacturing capacity costs as we continue to improve our manufacturing efficiency. R&D expenses for the quarter were $651 million, a 7% decrease compared to last year. The decline was driven by lower clinical development costs following the wind down of several late-stage programs. SG&A expenses for the quarter were $216 million, down 6% from last year, reflecting continued cost discipline across the organization.

Our income tax provision was immaterial in both periods as we continue to maintain a global valuation allowance, which limits our ability to recognize tax benefits from losses. Net loss for the quarter was $782 million, improving by $43 million or 5% compared to last year. Loss per share was $1.97 for the quarter compared to $2.13 last year. We ended the quarter with cash and investments of $6.9 billion compared to $7.5 billion at the end of the first quarter. The decrease primarily reflected cash used to fund operations as we continued to invest in R&D and advance our pipeline. In July, we paid $950 million related to the litigation settlement announced earlier this year, which will be reflected in our third quarter cash balance. Now let's turn to our financial framework for 2026.

We still expect total revenue to grow up to 10% in 2026 with the geographic mix and quarterly phasing I previously mentioned. Our 2026 revenue guidance factors in potential future declines in COVID vaccination rates and continues to assume no revenue from mFLUSIVA and mCOMBRIAX. We are lowering our cost of sales projection by $0.1 billion to $1.7 billion, reflecting additional manufacturing efficiency gains. The $1.7 billion estimate includes $0.9 billion of expense related to the previously announced litigation settlement charge. We are also lowering our R&D expense estimate by $0.1 billion to $2.9 billion due to operational efficiencies. SG&A expenses are still expected to be approximately $1 billion flat versus the prior year. Similar to 2025, our commercial spend will be more heavily weighted to the second half of the year due to the seasonality of our business.

In aggregate, excluding the $0.9 billion litigation charge, we are expecting total GAAP operating expenses of $4.7 billion and $4 billion of cash costs, which excludes stock-based compensation, depreciation, and amortization. Each reflect a $0.2 billion improvement compared to our previous guidance. We expect taxes to be negligible in 2026. Capital expenditures are still projected to be between $0.2 billion-$0.3 billion. Cash and investments are now projected to be between $4.7 billion-$5.2 billion at the end of 2026, which reflect the improvement in our cash cost guidance. As a reminder, our cash guidance does not assume any additional drawdown from our remaining $0.9 billion undrawn credit facility. With that, I will now turn the call over to Stephen.