U.S. respiratory vaccine manufacturers face challenges on multiple fronts in the 2024-2025 season. Sales of COVID-19 vaccines are declining, companies expect weak demand for flu vaccines, and the potentially fast-growing respiratory syncytial virus space is struggling with recommendations that tilted to limit growth. Against this background, Moderna is trying to establish itself in these markets.
Moderna’s Spikevax vaccine was a cornerstone of the public health response to COVID-19, but sales declined as the crisis subsided, forcing the biotech to work on creating new growth drivers. The company has approval for an RSV vaccine and the The FDA approved last week its updated mRNA COVID-19 vaccine – as well as Comirnaty from Pfizer-BioNTech – to protect against variants currently circulating in the US Moderna also has positive Phase III data on a flu-COVID combination vaccine, while Pfizer/BioNTech is working on a Late-stage setback Earlier this month, the biotech company could extend its lead with a combination vaccine that produces better immune responses against the coronavirus and three strains of flu.
Moderna is “the clear candidate for potential approval of a combined influenza/COVID mRNA vaccine,” William Blair analyst Myles Minter wrote in a note to investors earlier this month, adding that this will be “an important factor in determining the quality of the 2026 break-even guidance, which has recently come under increased investor scrutiny given the significantly lowered 2024 product sales guidance.”
As part of its second-quarter earnings report earlier this month, Moderna announced lowered its sales forecast for 2024 from an estimated $4 billion to a range of $3 billion to $3.5 billion due to weak demand for its COVID vaccine.
Jefferies analyst Michael Yee said in a note to investors that the guidance was “worse than expected” and raised questions about management’s credibility. “The biggest disappointment is that we are seeing a large cut in guidance for the second year in a row, despite management having consistently high confidence in the guidance each year and investors being dissatisfied with the credibility of the guidance, combined with consistent confidence, e.g. on COVID and other vaccine areas, that has again failed to materialize,” Lee wrote.
In flu, Moderna will enter a market with no growth and dominated by incumbents. Sanofi forecasts flu vaccine sales to decline in the low single digits this year as the company expects “weaker vaccination rates,” Chief Financial Officer François-Xavier Roger said on a second-quarter earnings call in July.
The number of flu vaccine doses distributed in the United States reached its peak at 194.4 million in the pandemic-era 2020 to 2021 respiratory disease season. By the 2023-2024 season, the number was slipped to 157.7 million. The number of doses has decreased compared to the pre-pandemic period, although more people in 2023 as 2019 They say vaccinations are the best way to prevent flu-related hospitalizations and deaths. Last year’s poll found that 31% of people do not trust vaccines.
Increasing COVID vaccination rates
Although the market for flu vaccines has shrunk, vaccination acceptance still far exceeds the current distribution of COVID-19 products. Minter said BioSpace The U.S. vaccination rate for COVID-19 was 11% last year, compared to about 44% for flu vaccines. The gap in vaccination rates presents a potential opportunity for Moderna.
“Could you bridge the gap between the declining COVID-19 vaccination rate and the relatively stable flu vaccination rate? That’s what (Moderna) will address with a potential combination product,” Minter said. “You may not be able to build a flu market with it. But you may be able to bridge the gap and increase the COVID-19 vaccination rate with a combination product.”
However, Moderna will not have a combination product that could help it increase COVID-19 vaccination rates in the coming respiratory season. In the absence of that product, the biotech’s efforts to increase rates are focused on activities such as a “back to basics” education campaign. Moderna CEO Stéphane Bancel said on a second-quarter earnings call earlier this month that the goal is to communicate the importance of getting an annual COVID-19 vaccination and to educate people about the dangers of long COVID and how vaccines can help reduce the risk.
The company launched the awareness campaign before the start of the COVID-19 season. running Ads on Facebook and Instagram with messages like “The risk of long COVID disease increases with each infection.” The ads show activities that people cannot do if they have COVID-19 or long COVID, such as playing fetch with their dog or going out to dinner with their wife. Minter expects the ads will have only a limited impact.
“Long COVID is not something that just popped up,” Minter said. “Could a campaign on Long COVID increase vaccination rates by a few percentage points? Absolutely. But will that really matter to Moderna? Probably not. They want to significantly close the gap between vaccination rates for flu and COVID-19.”
RSV gain market share
Bancel said the biotech faces similar competitive pressures with COVID-19 and RSV. Moderna competes with Pfizer for the COVID-19 market and Pfizer and GSK for the RSV opportunity. The biotech faces challenges because its major competitors have bundled products and been “much more aggressive” in activities such as supply chain, pricing and marketing spend, Bancel said.
Jefferies analyst Peter Welford reported in a note to investors last week that U.S. prescriptions for GSK’s RSV vaccine Arexvy rose more than 22% week-over-week, in line with expectations. “GSK’s market share falls 120 basis points to 69%, with Pfizer’s Abrysvo growing slightly faster at +29% w/w, while Moderna’s mRESVIA remains negligible,” Welford wrote.
Moderna’s mRESVIA, approved by the FDA At the end of May, the company’s second product and the third RSV vaccine to come onto the market, after those developed by GSK and Pfizer. The problem for all three companies is that they all face potential declines in vaccine sales due to recently updated CDC guidelines regarding the administration of vaccinations to seniors, where Minter claims that “neither mRESVIA nor the protein-based RSV vaccine provides a clear benefit.”
For RSV, Moderna’s attempt to overcome the challenges is focusing on features that set its mRESVIA vaccine apart from competitors, particularly the fact that it is the only product available as a prefilled syringe and that trials have not yet seen any cases of Guillain-Barré syndrome, a side effect that CDC warns of for RSV vaccines in general.
Bancel said Moderna remains confident that its delivery format “will resonate well with customers and provide them with the opportunity to use their time much more efficiently during the busy fall vaccination season and reduce potential medical errors.” However, Moderna CFO James Mock acknowledged that “this year is not going as we expected.” The biotech’s product arrived too late to impact the 2024-2025 RSV season.
“When Moderna came to market with its recommendation for use in RSV, the contracts with CVS and Walgreens and the major pharmacies in the US were already signed and went to GSK and Pfizer,” Minter said.
Lee stressed that Moderna has “reduced confidence in RSV” and “now expects a slower ramp due to competition and fewer contracts.” Management is clear that it expects “modest” sales this year, he said.
Given this situation, Moderna hopes to launch on a level playing field with GSK and Pfizer in 2025. After that, the battle for market share will depend on factors such as safety and durability, as well as how that data influences CDC recommendations. Ease of use could also play a role. While Moderna may have an advantage in some of these areas, the biotech also has to compete with well-oiled commercial machines.
“It will all come down to contracting capacity,” Minter said. “And obviously GSK and Pfizer are not small companies to compete with on vaccine contracts and potential bundling.”
