Moderna's work developing seasonal vaccines is 'risky' under current FDA, analyst says

By Jaimy Lee

The biotech company said the FDA won't review its flu vaccine, in the latest hit to mRNA development

As COVID-19 vaccine sales dwindle, pressure on Moderna to grow its business has increased.

Moderna's mRNA-centric business is in conflict with the U.S. government's shifting views on mRNA technology, and analysts say that's a risk.

The biotech announced Tuesday evening that in a rare move, the Food and Drug Administration won't review its application for a mRNA-based flu vaccine over concerns about the choice of vaccine tested against the experimental vaccine in Phase 3 clinical trials. Moderna described the FDA as "inconsistent" in its communications.

Moderna's shares (MRNA) were down about 12% on Wednesday morning as investors digested the regulatory action and how it could impact the company's experimental COVID-19/flu shot, which has been submitted to the FDA.

Moderna's "reliance on seasonal vax [is] risky in today's regulatory environment," Citi's Geoffrey Meacham wrote in a note.

One of the FDA's political appointees is Vinay Prasad, who is the regulator's top vaccine official. Within weeks of joining the FDA, Prasad, a physician and an outspoken critic of mRNA vaccines, posted on X that "the MRNA vaccine, I think, is a limited construct in biology. And I have no problem with it being deprioritized."

In August, the Trump administration said it would stop funding mRNA drug development.

The FDA's decision "reflects the 'maximum pressure' footing vis-a-vis mRNA vaccines by current [Department Health and Human Services]/FDA leadership, which has been evident with clockwork consistency," Leerink Partners analyst Mani Foroohar told investors on Wednesday.

At the same time, Moderna is under pressure to grow its business. It has three approved products: the COVID-19 vaccine it became known for, a COVID-19 booster and an RSV vaccine that came to market in 2024. Along with its flu and flu/COVID-19 vaccine candidates, it also has cancer and norovirus vaccines in late-stage studies. But as COVID-19 vaccine sales continue to dwindle, that pressure has increased, in part driven by the company's own decision to put out breakeven guidance for 2028.

"You have this accumulation of new product, up to six products in the vaccine portfolio of Moderna by 2028, driving growth not only in the U.S. but very importantly outside the U.S.," CEO Stéphane Bancel said last month at an investor conference.

Moderna said the flu vaccine's application has been accepted in Australia, Canada and the European Union, and the company is requesting a meeting with the FDA to further discuss the concerns about the comparator in the Phase 3 trials. William Blair analyst Myles Minter had expected $1 billion in revenue for the flu vaccine if it was approved.

"We continue to expect approval of mRNA-1010, and potentially a path forward for mRNA-1083," in locations outside of the United States, he told investors.

Moderna's stock has gained 36% over the last year. The company is set to report its fourth-quarter results on Friday.

-Jaimy Lee

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02-11-26 1044ET