$MRNA - Moderna
We will end the week with a special and exclusive event for channel members!
Today, a special guest is hosted on our channel - a dear friend, a skilled hedge fund manager in the pharma sector, with a very impressive track record - and the senior pharma analyst in Israel - Uri Harkshovitz!
The biotech world can be a very cruel place - Moderna's adventures in biotech land!
Hello friends,
$MRNA publishes an update that is completely bleak.
An update that illustrates how dangerous, cruel, and unrestrained the biotech world can be!
The stock today completes a 60% decline from its peak in May this year - and an 85% decline from its peak 3 years ago!
So what did we have there?
A severe profit warning for next year.
Revenue guidance comes in 20% below consensus.
This is an increase in burn of $500 million.
The miss is also due to COVID revenue, but what is more disappointing is the low guidance for the new RSV vaccine.
The company is trying to address the problem by cutting 5 products from its pipeline.
This leads to savings of about $1 billion in R&D, but the vast majority of it will only be implemented in 2027.
Additionally, the launch of the therapeutic vaccine with MRK is delayed from 2025 to 2027, as the US Department of Health is requesting a full trial from the company and is not willing to approve the product based on Phase 2.
And now for the real fun!
The company delays its profitability guidance from 2026 to 2028!
As of the end of June, the company has $8.5 billion in cash, versus $1.3 billion in debt.
And at the current cash burn rate:
Cash is expected to deplete to about $6 billion by the end of next year -> $4 billion by the end of 2026 -> $2 billion by the end of 2027 -> and barely last until the point where the company expects profitability only in 2028, hoping nothing else goes wrong.
The debt, of course, remains.
And this, of course, means that another slight hiccup in execution - and the company will need to raise capital.
This also indicates irresponsible financial management, to say the least.
And this, friends, is very, very bad.
In summary - The company is in a bad place. In such cases, we find it best to simply avoid.
Uri.