Moderna secures $750 million from Blackstone Life Sciences to develop flu shots

Moderna is developing several new vaccines, including for cancer and respiratory syncytial virus (RSV), resulting in high research and development spending. The funding will reduce R&D expenses, although Moderna said it still plans to spend about $4.5 billion this year.

Moderna on Wednesday said Blackstone's life sciences arm would offer $750 million to help fund development of its flu vaccines, bolstering the company's efforts to advance multiple vaccines in the face of a steep decline in sales of its COVID-19 shots. Moderna is developing several new vaccines, including for cancer and respiratory syncytial virus (RSV), resulting in high research and development spending.

The funding will reduce R&D expenses, although Moderna said it still plans to spend about $4.5 billion this year. "We're excited about this because it checks all the boxes," Chief Financial Officer James Mock said during the company's 2024 vaccines day event. "It allows us to accelerate into new programs. It allows us to diversify our revenue stream and it reduces the risk, frankly, of the flu program as well."

Blackstone Life Sciences will get commercial milestone payments and low-single digit royalties on the influenza vaccine as part of the agreement, said Moderna, whose current lone marketed product is its COVID-19 shot. Moderna will also pay Blackstone a proportional royalty on the combination vaccine against influenza and COVID, if it is approved, based on the fair value for the flu component, Mock said.

The company would consider this project financing model for other experimental vaccines, if there is a need, he added. Moderna plans to move three vaccines to late-stage trials this year, including one against the varicella-zoster virus that can cause shingles and another against the pathogen that causes infectious mononucleosis, commonly known as mono.

Moderna shares were up about 2% in afternoon trading. Sales of Moderna's COVID shot have fallen precipitously from its peak of more than $18 billion in 2022 as pandemic concerns fade, even as R&D expenses remain high. The company, which recorded a $4.7 billion net loss in 2023, forecast $4 billion for COVID shot sales in 2024.

Moderna expects to launch its RSV vaccine this year in the United States, and apply for approval of the flu shot, which it sees reaching the market in 2025. The company estimated the overall market for flu vaccines at about $7 billion this year, with an opportunity to grow as new shots become available. It sees peak annual sales of the RSV shot market reaching $10 billion.

Moderna's flu shots have generated a stronger immune response against all four A and B strains of the influenza virus compared to traditional flu shots in a late-stage trial, according to data released in September.

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