Moderna 10-Q 2022-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _ to _

Commission File Number: 001-38753

Moderna, Inc.

(Exact Name of Registrant as Specified in Its Charter)

(617) 714-6500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of October 31, 2022, there were 384,180,469 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (Form 10-Q) contains express or implied forward-looking statements. All statements other than those of historical facts contained in this Form 10-Q are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements in this Form 10-Q include, but are not limited to, statements about:

• our activities with respect to our COVID-19 vaccines, and our plans and expectations regarding future generations of our COVID-19 vaccines, including boosters, that we may develop in response to variants of the SARS-CoV-2 virus, ongoing clinical development, manufacturing and supply, pricing, commercialization, regulatory matters (including dosage for vaccines and authorization or approval for boosters), demand for COVID-19 vaccines, and third-party and governmental arrangements and potential arrangements;

• timing of product sales of our Omicron-targeting bivalent booster vaccines against COVID-19;

• our ability to contract with third-party suppliers, distributors and manufacturers and their ability to perform adequately, particularly with respect to the timely production, release and delivery of our COVID-19 vaccines, including variant-specific booster vaccines;

• our ability and the ability of third parties with whom we contract to successfully manufacture our commercial products at scale, as well as drug substances, delivery vehicles, development candidates, and investigational medicines for preclinical and clinical use;

• internal and external costs associated with manufacturing for our products, including our COVID-19 vaccines, as well as costs associated with winding down or terminating relationships or agreements with third-party manufacturers or suppliers in connection with the production of our COVID-19 vaccines;

• the scope of protection we are able to establish and maintain for intellectual property rights covering our commercial products, investigational medicines and technology;

• the initiation, timing, progress, results, and cost of our research and development programs and our current and future preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work and the period during which the results of the trials will become available;

• the direct or indirect impact of COVID-19 or any future large-scale adverse health event, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response, material delays in diagnoses, initiation or continuation of treatment for diseases that may be addressed by our development candidates and investigational medicines, or in patient enrollment in clinical trials, potential clinical trials, regulatory review or supply chain disruptions, and other potential impacts to our business, the effectiveness or timeliness of steps taken by us to mitigate the impact of COVID-19, and our ability to execute business continuity plans to address disruptions caused by COVID-19 or any future large-scale adverse health event;

• our anticipated next steps for our development candidates and investigational medicines that may be slowed down due to the impact of COVID-19, including our resources being significantly diverted towards our COVID-19 vaccine efforts;

• our ability to identify research priorities and apply a risk-mitigated strategy to efficiently discover and develop development candidates and investigational medicines, including by applying learnings from one program to our other programs and from one modality to our other modalities;

• our ability to obtain and maintain regulatory approval of our investigational medicines;

• our ability to commercialize our COVID-19 vaccines and any other products, if approved;

• the pricing and reimbursement of our medicines, if approved;

• the implementation of our business model, and strategic plans for our business, investigational medicines, and technology;

• estimates of our future expenses, revenues and capital requirements;

• the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements, and our ability to attract collaborators with development, regulatory, and commercialization expertise;

• future agreements with third parties in connection with the commercialization of our investigational medicines, if approved;

• the size and growth potential of the markets for our investigational medicines, and our ability to serve those markets;

• our financial performance;

• the rate and degree of market acceptance of our investigational medicines;

• our ability to produce our products or investigational medicines with advantages in turnaround times or manufacturing cost; and

• developments relating to our competitors and our industry.

Forward-looking statements often contain words such as “will,” “may,” “should,” “could,” “expects,” “intends,” “plans,” “aims,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our operational or financial performance, and involve risks, uncertainties, and other factors that may cause our actual results to differ materially from any future results expressed or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section entitled “Risk Factors” and elsewhere in this Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual results could differ materially from those expressed or implied by the forward-looking statements.

The forward-looking statements in this Form 10-Q represent our views as of the date of this Form 10-Q. We undertake no obligation to update any forward-looking statements, except as required by applicable securities law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-Q. However, any further disclosures made on related subjects in our subsequent reports filed with the Securities and Exchange Commission should be consulted.

TRADEMARKS

This Form 10-Q contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to may appear without the ® or ™ symbols, but such references are not intended to indicate that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our reference to other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

NOTE REGARDING COMPANY REFERENCES

Unless the context otherwise requires, the terms “Moderna,” “the Company,” “we,” “us,” and “our” in this Form 10-Q refer to Moderna, Inc. and its consolidated subsidiaries.

ADDITIONAL INFORMATION

Our website, www.modernatx.com, including the Investor Relations section, www.investors.modernatx.com; and corporate blog www.modernatx.com/moderna-blog; as well as our social media channels: Facebook, www.facebook.com/modernatx; Twitter, www.twitter.com/modernatx; and LinkedIn, www.linkedin.com/company/modernatx; contain a significant amount of information about us, including financial and other information for investors. We encourage investors to visit these websites and social media channels as information is frequently updated and new information is shared. Information contained on our website, corporate blog and social media channels shall not be deemed incorporated into, or be a part of, this Form 10-Q.

Table of Contents

MODERNA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in millions, except per share data)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, in millions, except per share data)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in millions)

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You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited financial information and related notes included in this Form 10-Q and our consolidated financial statements and related notes and other financial information in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission (the SEC) on February 25, 2022 (the 2021 Form 10-K). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in Part II, Item 1A - Risk Factors in this Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines to create a new generation of transformative medicines to improve the lives of patients. Our platform builds on continuous advances in basic and applied mRNA science, delivery technology, and manufacturing, providing us the capability to pursue in parallel a robust pipeline of new development candidates. We are developing therapeutics and vaccines for infectious diseases, immuno-oncology, rare diseases, autoimmune diseases and cardiovascular diseases, independently and with our strategic collaborators. Within our platform, we develop technologies that enable the development of mRNA medicines for diverse applications. When we identify technologies that we believe could enable a new group of potential mRNA medicines with shared product features, we call that group a “modality.” We have created seven modalities to date:

• prophylactic vaccines;

• systemic secreted and cell surface therapeutics;

• cancer vaccines;

• intratumoral immuno-oncology;

• localized regenerative therapeutics;

• systemic intracellular therapeutics; and

• inhaled pulmonary therapeutics.

On December 18, 2020, we received an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for the emergency use of the Moderna COVID-19 Vaccine (also referred to as mRNA-1273 and marketed under the brand name Spikevax) as a two-dose, 100 µg primary series in individuals 18 years of age or older. In January 2022, we received full commercial approval for Spikevax as a two-dose, 100 µg primary series to prevent COVID-19 in individuals 18 years of age and older in the United States. Spikevax is approved or authorized in individuals 18 years and older in more than 70 countries. In addition, Spikevax is authorized by the FDA and global regulators in more than 50 countries as a two-dose 100 µg primary series in adolescents ages 12 to 17 years old and as a two-dose 50 µg primary series in children ages 6 to 11 years old. Additionally, a two-dose, 25 µg primary series of Spikevax is authorized in young children ages 6 months to 5 years old in the United States, Canada, Australia, and other jurisdictions.

The FDA, European Medicines Agency (EMA), Swissmedic and other health agencies around the world have authorized a booster dose of Spikevax at the 50 µg dose level for adults ages 18 years and older. In March 2022, the FDA and other health agencies authorized a second booster dose at the 50 µg dose level for adults 50 years and older and adults over 18 years of age with certain kinds of immunocompromise.

On August 15, 2022, we received the first authorization for our BA.1 Omicron-targeting bivalent COVID-19 booster vaccine (Spikevax Bivalent Original/Omicron, mRNA-1273.214) from the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom, given as a 50 µg booster dose for individuals 18 years of age and older who have received either a primary series or an initial booster of any of the authorized or approved COVID-19 vaccines. The EMA in the European Union provided a similar authorization for mRNA-1273.214 as a booster vaccine for individuals 12 years and older on September 2, 2022. During the third quarter of 2022, authorizations for mRNA-1273.214 as a booster vaccine were also received in the United Kingdom, the European Union, Japan, Australia, Canada and Switzerland.

On August 31, 2022, we received an EUA from the FDA for our BA.4/BA.5 Omicron-targeting bivalent COVID-19 booster vaccine (mRNA-1273.222), given as a 50 µg booster dose for individuals 18 years of age and older who have received either a primary series or an initial booster of any of the authorized or approved COVID-19 vaccines. On October 12, 2022, we received an EUA from the FDA for mRNA-1273.222 as a 50 µg booster dose for adolescents 12 to 17 years old and as a 25 µg booster dose for children 6 to 11 years old, each following a completed primary series of any authorized COVID-19 vaccine or a previous booster. The EMA in the European Union, the MHRA in the United Kingdom and other countries worldwide have provided similar authorizations for mRNA-1273.222.

Business Highlights and Recent Developments

Moderna COVID-19 Vaccine Clinical Studies

• Omicron-targeting bivalent boosters (mRNA-1273.214/.222):** We have received authorization from regulatory agencies around the globe for two different Omicron-targeting bivalent booster vaccines against COVID-19, including in the United States, Australia, Canada, Europe, Japan, Switzerland, South Korea, Taiwan and the UK, with additional regulatory submissions completed worldwide.

• mRNA-1273.214 is a bivalent vaccine targeting the BA.1 Omicron variant, combined with Spikevax. mRNA-1273.222 is a bivalent vaccine targeting the BA.4/BA.5 Omicron variants, combined with Spikevax. Both boosters are administered as a single dose of 50 µg in individuals ages 12 and older, and as a single 25 µg dose in pediatric populations, ages six to 11. mRNA-1273.214 is being studied to evaluate its immunogenicity, safety and reactogenicity as a single booster dose in adults aged 18 years and older. mRNA-1273.214 is being evaluated in an ongoing registrational, Phase 2/3 study in the U.S. and a Phase 3 study in the UK. A Phase 2/3 clinical trial for mRNA-1273.222 is fully enrolled and currently underway, with initial data expected later this year.

• Based on clinical trial data from the Phase 2/3 trial, mRNA-1273.214 met all primary endpoints, including superior neutralizing antibody response against Omicron (BA.1) when compared to the currently authorized 50 µg booster dose of Spikevax (mRNA-1273) in previously uninfected participants. A booster dose of mRNA-1273.214 increased neutralizing geometric mean titers (GMT) against Omicron approximately 8-fold above baseline levels. In addition, mRNA-1273.214 elicited higher neutralizing antibody titers against the Omicron subvariants BA.4 and BA.5 when compared to Spikevax (mRNA-1273) regardless of prior infection status or age, including in those aged 65 and older. mRNA-1273.214 was generally well tolerated, with a reactogenicity and safety profile consistent with the currently authorized booster.

• For the third quarter of 2022, we recognized product sales of $3.1 billion from sales of our COVID-19 vaccines, compared to $4.8 billion in the third quarter of 2021.

Key Updates for our Other Development Candidates

• Seasonal influenza (flu) (mRNA-1010):** As part of our influenza vaccine development strategy, we are developing five different influenza vaccines. mRNA-1010 is a single investigational vaccine consisting of four distinct mRNA sequences that encode the A H1N1, H3N2 and influenza B Yamagata and Victoria lineages in our proprietary LNP. mRNA-1011 and mRNA-1012 are investigational vaccines that will include the four WHO-recommended strains and aim to add additional hemaggl

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Our market risks, and the way we manage them, are summarized in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our 2021 Form 10-K. There have been no material changes to our market risk or to our management of such risks for the three and nine months ended September 30, 2022.

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2022, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by the collusion of two or more people or by a management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II

Item 1. Legal Proceedings

We are involved in various claims and legal proceedings of a nature considered ordinary course in our business, including the intellectual property litigation described below and in our quarterly report on Form 10-Q for the quarter ended June 30, 2022. Most of the issues raised by these claims are highly complex and subject to substantial uncertainties. For a description of risks relating to these and other legal proceedings we face, see Part I, Item 1A, “Risk Factors,” of our 2021 Form 10-K, including the discussion under the headings entitled “Risks related to our intellectual property,” and “Risks related to the manufacturing of our commercial products, development candidates, investigational medicines and our future pipeline.” The outcome of any such proceedings, regardless of the merits, is inherently uncertain; therefore, assessing the likelihood of loss and any estimated damages is difficult and subject to considerable judgment.

Pfizer/BioNTech Patent Litigation

On August 26, 2022, Moderna filed a lawsuit in the U.S. District Court for the District of Massachusetts against (1) Pfizer Inc. (Pfizer) and (2) BioNTech SE, BioNTech Manufacturing GmbH, and BioNTech US Inc. (collectively BioNTech). This lawsuit seeks damages for infringement of U.S. Patent Nos. 10,898,574, 10,702,600 and 10,933,127 in Pfizer and BioNTech’s manufacture and sale of their messenger RNA, or mRNA, COVID-19 vaccines. The complaint seeks a judgment of infringement of the asserted patents, monetary damages (together with interest), costs and expenses of the lawsuit, and attorneys’ fees.

Also on August 26, 2022, Moderna initiated patent infringement proceedings in the Dusseldorf Regional Court in Germany against Pfizer, BioNTech and related entities with respect to European patents EP 3 718 565 B1 and EP 3 590 949 B1, which also concern Moderna’s mRNA platform technology and disease-specific vaccine designs, including coronaviruses. Moderna has also initiated similar proceedings in the Netherlands and UK. As in the U.S. action, Moderna seeks a judgment of infringement of the asserted patents, monetary damages (together with interest), costs and expenses of the lawsuit, and attorneys’ fees.

In the U.K., Pfizer Inc. and BioNTech SE, have also filed an action seeking revocation of EP 3 718 565 B1 and EP 3 590 949 B1 in the U.K., along with costs (together with interest).

In addition, the Moderna patents being asserted in the European actions are subject to notices of opposition, including by BioNTech SE, seeking to revoke EP 3 718 565 B1 and EP 3 590 949 B1, which have been filed at the European Patent Office (EPO). The periods for filing such oppositions for EP 3 718 565 B1 and EP 3 590 949 B1 end on January 27, 2023 and February 18, 2023, respectively.

Information regarding risk and uncertainties related to our business appears in Part I, Item 1A. “Risk Factors” of our 2021 Form 10-K. There have been no material changes from the risk factors previously disclosed in the 2021 Form 10-K other than those set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and filed with the SEC on May 4, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information with respect to the shares of common stock repurchased by us during the three months ended September 30, 2022:

(1) Average price paid per share includes related expenses.

(2) On February 22, 2022, our Board of Directors authorized a share repurchase program for our common stock of up to $3.0 billion, with no expiration date. This share repurchase program was increased by the Board of Directors by an additional $3.0 billion on August 1, 2022, also with no expiration date.

Refer to Note 13 to condensed consolidated financial statements for information regarding our share repurchase programs.

The Exhibits listed below are filed or incorporated by reference as part of this Form 10-Q.

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.