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SHOT IN THE ARM

Moderna is buying back $1 billion of its stock after another bumper quarter

A healthcare worker holds a vial of the Moderna COVID-19 Vaccine at a vaccination site in New York
Mike Segar / Reuters
A little earnings booster
  • Samanth Subramanian
By Samanth Subramanian

Looking into the Future of Capitalism

Published Last updated on

Sales of Moderna’s successful Covid-19 vaccine have earned the company so much cash that it is preparing to buy back $1 billion of its stock.

The biotechnology company reported $4.4 billion in revenue for the second quarter. The buyback is in anticipation of even richer times to come. During a call with analysts, Moderna president Stephen Hoge said he expects people will need a third, booster dose of its vaccine by the end of this year to keep themselves secure against Covid-19—particularly against variants such as the delta, which is currently driving up caseloads in countries around the world.

How heavily the Covid-19 vaccine has propelled Moderna’s fortunes can be seen from a comparison of the past quarter to the same period a year ago. In the second quarter of 2020, Moderna’s total revenues were just $67 million. In the same quarter this year, the Covid-19 vaccine alone registered $4.2 billion in revenue. By the end of 2021, Moderna will have racked up sales of $20 billion, the company projected.

Moderna’s vaccine is still effective after six months

Moderna also revised its efficacy numbers from a clinical trial of 30,000 people that began last July. The company had earlier pegged the efficacy at 94.1% from that trial, but a new analysis has put the number at a still-high 93%. The vaccine continued to protect against the main strain of Covid-19 after six months, Stéphane Bancel, Moderna’s CEO, said in a statement. But against variants, the strength of antibodies generated by the vaccine diminished around six months after both doses were administered, according to a Moderna study that has yet to be peer-reviewed.

But if Moderna is relying on boosters in Western countries to drive its revenues further, it sits at odds with the dire vaccine divide emerging around the world. Billions of people in the global south remain unvaccinated, and the World Health Organization (WHO) warned on Aug. 4 that when rich countries give out booster shots, they will occupy so much vaccine manufacturing capacity that poorer nations will struggle to obtain even their first and second doses.

How many vaccines will Covax get from Moderna?

Meanwhile, Moderna has hiked the price of its vaccine, according to the Financial Times, which studied portions of the company’s contracts with the European Union. From $22.60 per dose in an initial procurement, the price rose to $25.50, putting the vaccine further out of reach for lower- and middle-income countries.

In its earnings call, Moderna announced it has signed advance purchase agreements worth $12 billion for 2022, as well as options for another $8 billion in orders. Not surprisingly, most of the countries involved are wealthy; some of them, such as Taiwan and Israel, already have earmarked vaccines for purchase in 2023.

In May, Moderna had announced an agreement to provide 500 million low-cost doses to low-income countries by the end of 2022, via the Covax facility backed by the WHO. In its earnings presentation, though, Moderna showed advance purchase agreements with Covax for just 34 million doses in 2021 and 117 million doses in 2022. At the moment, Covax merely has an option in place to buy the remaining 350 million or so doses.

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