Moderna Vax Sales Plummet
You are undoubtedly aware of Moderna, Incorporated, one of the primary producers of the Covid-19 Vaccine. hundreds of millions of Americans and likely billions around the globe have taken their brand, named “Spikevax.” Moderna is on the leading edge of medical technology, having developed this Vaccine through a process called “Messenger RNA,” or just MRNA for short. Indeed, Moderna’s stock symbol, MRNA, is the company’s first genuine product and the basis of its fortunes.
Yesterday Modern announced their profits for the fourth quarter, and I almost fell off my chair when I read them. To say these were shocking results is an understatement. But to fully appreciate what was so startling, we must provide a little background on Moderna.
And this is an excellent place to point out that this will be strictly a financial discussion. There are, of course, significant medical issues involved here, but that’s not my field. My specialty is finance. And from a financial perspective, Moderna is one of the most interesting “case studies” of today’s interplay between private business and the Federal Government with its various agencies.
Our story shows that various Agencies, Bureaus, Institutes, Authorities, and Services play a vital but changing role in financing Moderna during its “startup” phase. Without getting too complicated here, there will be more than enough players to keep track of. Generally, there are just a few significant parties in producing and marketing a product. There is the company itself, in this case, Moderna. The end customers will purchase and use the product. There’s the Venture Capitalist. They’re the ones who supply the capital needed before the company becomes profitable. And finally, the Regulators who approve/disapprove the product.
We begin with Moderna, Incorporated, the Cambridge, Massachusetts-based medical research firm. For a decade or more, Moderna was in research limbo. Founded by Academic researchers, the company still needed to find that blockbuster product to make them commercially viable.
Then came 2020, and everyone’s life changed — especially those at Moderna. As you know, sometime in 2019, the Covid disease infected many in China. And 2019 would forever become part of the disease’s name. However, most of us in the United States did not hear of the outbreak for months. If I recall, I first saw a report on the pandemic in February 2020. Let’s walk through those first few months of 2020.
Fortunately for Moderna, the month before, in January, they announced that they were actively pursuing promising research into what would become their MRNA-based Vaccine.
A month or two before that, Anthony Fauci, at the National Institute of Allergy and Infectious Disease, NIAID for short, had patented an MRNA therapy. Which is what Moderna was reacting to in making their announcement.
So three critical elements came together at the beginning of 2020 to lead Moderna in producing their breakthrough product, Spikevax.
The timeline looks like this: First, there is an outbreak of the disease in China. Next, the NIAID patent provided the “blueprint” for an MRNA-based Vaccine, and finally, a willing maker of the Vaccine appeared, Moderna.
It’s also the first time we see our government actively involved in vaccine production. Dr. Fauci and NIAID were the basic researchers on the project.
Then. Dr. Fauci removes the lab coat and puts on his Venture Capitalist hat. NIAID provides nearly $1 billion in capital to fund Moderna through the FDA approval process. Now the government is the chief VC on this project.
Later, the Federal Government will directly provide an additional $2 ½ billion in funding, supporting NIAID with additional financing. They’re now VC 2 on the project.
On December 18, 2020, just over 11 months after announcing they were beginning research, Moderna achieved the coveted FDA, Emergency Use Authorization, allowing Moderna to bring Spikevax to market.
And when they come to the market, who is their customer? That’s right. The same US Government will now purchase as many doses as Moderna can. Vax customer is the fourth role for the Feds in developing Moderna’s Vaccine. First as a researcher, then as Venture Capitalist, then as chief medical regulator (FDA), and now as the customer.
It is an entrepreneur’s dream, authoritative research to develop your product, unlimited funding from the world’s richest Venture Capitalist, approval from another division of the same group, and now the world’s wealthiest customer. It doesn’t get better than this.
Talk about having the wind at your back.
This brings us to yesterday’s earnings from Moderna.
For over a year and a half, Moderna has been on a roll. Orders have been flowing like never before, so much so that Moderna lined up a network of subcontractors from Portsmouth, New Hampshire, to Visp, Switzerland, to keep up with the demand.
When suddenly the demand is gone, dropped off a cliff. In this reported quarter, sales were down by nearly a third. Spikevax, the hottest product in the country, generously provided by our Uncle Sam, is suddenly as dead as yesterday’s internet fad. The “must-have” therapy for nearly everyone is now old news.
The attitude of the American public has changed. And, as anyone responsible for marketing a significant product or service will tell you, once the public’s attitude changes, it’s generally over. The marketplace has seen dozens of products that were once “hot” but now forgotten. We can’t always tell why people’s attitudes change, but it can devastate the producer.
Your sales campaign is over when the public feels a product doesn’t live up to the “hype.”
And it looks like that’s what’s happening to the Moderna Spikevax.
Follow me here on Medium for more on money, finance, and politics.
