Moderna bags $750 million investment from Blackstone for flu vaccine development

Moderna vaccines: Massachusetts-based Moderna announced on Wednesday that Blackstone's life sciences arm would provide a substantial investment of $750 million. This funding injection is aimed at bolstering Moderna's efforts to diversify its vaccine portfolio amidst a notable decline in sales of its COVID-19 shots.

Moderna is actively engaged in the development of several new vaccines, ranging from cancer treatments to addressing respiratory syncytial virus (RSV). However, the ambitious vaccine development programs entail significant research and development (R&D) expenditures.

Chief Financial Officer James Mock expressed enthusiasm about the partnership during Moderna's 2024 Vaccines Day event, highlighting its multifaceted benefits. Mock stressed that the investment not only accelerates the progress of new vaccine programs but also diversifies the company's revenue streams while mitigating risks associated with the flu program.

Under the agreement, Blackstone Life Sciences will receive commercial milestone payments and low-single-digit royalties on the influenza vaccine. Moreover, if Moderna's combination vaccine against influenza and COVID receives approval, Blackstone will be entitled to a proportional royalty based on the fair value for the flu component.

Moderna also expressed openness to considering this project financing model for other experimental vaccines in the future, should the need arise.

The infusion of funds comes at a crucial time for Moderna as it plans to advance three vaccines to late-stage trials this year, including candidates targeting the varicella-zoster virus and the pathogen responsible for infectious mononucleosis.

In response to the announcement, Moderna's shares saw a modest uptick of about 2 per cent in afternoon trading.

While sales of Moderna's COVID shot have significantly declined from its peak in 2022, the company continues to maintain high R&D expenses. Despite this, Moderna projects $4 billion in COVID shot sales for 2024.

Looking ahead, Moderna anticipates launching its RSV vaccine in the United States this year, with plans to seek approval for its flu shot, slated for market entry in 2025. The company estimates the global flu vaccine market to be approximately $7 billion this year, with potential for growth as new vaccines are introduced. Additionally, Moderna anticipates peak annual sales of the RSV shot market to reach $10 billion.

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

(With Reuters inputs.)