Does Moderna Need to Start Making Money?
Key Points
Moderna is losing billions of dollars per year.
The company has several promising new products that should be coming to the market within the next few years.
Moderna has prioritized spending efficiency and has plenty of cash on its balance sheet.
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Moderna (NASDAQ: MRNA) is best known for its COVID-19 vaccines, which were fast-tracked for approval in 2020 and subsequently generated tens of billions of dollars in revenue.
However, a lot has changed in the past few years. Although Moderna's COVID-19 vaccines remain its primary revenue stream, sales are just a fraction of what they were during the pandemic. Plus, the company is losing money hand over fist, posting a $2.8 billion net loss in 2025 and expecting billions in losses in 2026 as well.
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Based on this, you might think Moderna would be a terrible investment. But I'm not sure that's the case, and there are three main reasons why.
Image source: Getty Images.
1. Moderna's revenue could soar within a few years
Moderna has four commercial products today -- two COVID-19 vaccines, an RSV vaccine approved for vulnerable populations, and a combination COVID-19 and flu vaccine that was recently approved in Europe.
However, the real story is Moderna's pipeline. The company has over 30 vaccines and therapeutics in development, including its highly anticipated flu vaccine that is awaiting approval in the U.S. and Europe. It is developing several other vaccines, as well as treatments for rare diseases and several types of cancer.
Moderna has a stated goal of 10 commercial products within a few years. If it can get some of its most promising candidates to market, its revenue could easily be several times the current level.
2. Cost management is a priority
Second, Moderna's management team has made expense reduction a priority. It has already trimmed several hundred million dollars in ongoing expenses and anticipates about $500 million in additional reductions next year.
It is doing this by streamlining its manufacturing processes and strategically focusing its R&D efforts on its pipeline candidates with the most potential. This alone could help reduce the losses significantly.
3. Moderna can handle the losses in the meantime
Finally, Moderna has $7.5 billion in cash on its balance sheet, so it can withstand the losses for the time being. If it loses about $2 billion this year, which seems likely, and not only cuts costs by another $500 million in 2027 but also generates revenue from at least one new commercial product, it's easy to see how these losses could get much smaller.
In fact, Moderna's management has said the company will be cash flow positive by 2028 and will get there without burning through the rest of its cash.
To sum it up, Moderna is losing money right now, but that's ok. It's all part of the process. If the company can reach its target of 10 commercial products and keep moving in the right direction on financial discipline, it could have a very bright future ahead.
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Matt Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Moderna. The Motley Fool has a disclosure policy.
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