Moderna, the biotech powerhouse known for its groundbreaking mRNA technology, announced on Thursday a strategic shift that aims to streamline its research and development (R&D) expenditures as it prepares to introduce several new products already under development. This decision comes as a response to the company's recent commercial challenges and recognition of the need for a more judicious approach to its R&D investments. The pharmaceutical firm anticipates reducing its annual R&D budget significantly, projecting a figure between $3.6 billion and $3.8 billion by the year 2027, a steep decline from an estimated $4.8 billion expected by the end of this fiscal year.
This adjustment reflects a careful recalibration of resource allocation in light of Moderna’s recent clinical success alongside its market difficulties. In its public statement, Moderna articulated, "The breadth of our clinical achievements coupled with recent hurdles in commercialization necessitate a more selective and measured strategy regarding our research and development budget." Looking ahead, Moderna has ambitious plans to submit applications for approval of three out of five planned respiratory vaccines.
This includes a next-generation COVID-19 vaccine and a respiratory syncytial virus vaccine specifically designed for high-risk younger adults. According to Chief Executive Stephane Bancel, the firm has an additional five non-respiratory products currently in clinical trials with a potential pathway to approval by the year 2027. Bancel further expounded, "The size of our late-stage pipeline combined with the challenges associated with launching new products compels us to focus on successfully bringing these 10 products to fruition for patients.
Therefore, we must decelerate our new R&D investments and strengthen our commercial operations." In response to the announcement, Moderna's stocks plummeted by 18% during trading hours on Thursday, indicating investor concerns regarding the company's financial outlook. For the period spanning 2025 to 2028, the company is set to implement a 20% cut in its R&D spending, translating to a revised budget of $16 billion instead of the previously estimated $20 billion.
For the upcoming year, Moderna projects R&D expenses to fall between $4.2 billion and $4.5 billion while envisaging a total of approximately $11.5 billion allocated to R&D from 2026 to 2028. Revenue expectations for 2025 are forecasted to be in the range of $2.5 billion to $3.5 billion, notably below the current consensus forecast of $3.95 billion from Capital IQ.
Nevertheless, for the years 2026 to 2028, Moderna anticipates a compound annual growth rate exceeding 25%, primarily driven by the introduction of new products to the market. Last month, the company additionally projected net product sales from its respiratory portfolio to fall between $3 billion and $3.5 billion for the current year. Moreover, Moderna expressed optimism regarding its commercial respiratory franchise, signaling expectations for profitability commencing in 2024 and aiming to conclude most respiratory-related investments by 2026..