Moderna, Inc. — FY2021 Form 10-K summary
Reporting period: Fiscal year ended December 31, 2021; filed February 25, 2022. This is an annual filing, not a standalone fourth-quarter report; the supplied filing text does not provide a clear set of Q4-only financial results. Financial statements were audited, with an unqualified opinion; the auditor also reported effective internal control over financial reporting.
Business context
Moderna is a biotechnology company developing mRNA vaccines and therapeutics across seven modalities. In 2021, its only commercial product was its COVID-19 vaccine, mRNA-1273 (Spikevax). The company shipped approximately 807 million doses during 2021 and 824 million cumulatively through year-end. In January 2022, the FDA approved Spikevax for adults 18 and older.
Financial highlights
Amounts below are in U.S. dollars; financial results are for the year ended December 31.
| Metric | FY2021 | FY2020 |
|---|---|---|
| Total revenue | $18.471 billion | $803 million |
| COVID-19 vaccine product sales | $17.675 billion | $200 million |
| Grant revenue | $735 million | $529 million |
| Collaboration revenue | $61 million | $74 million |
| Cost of sales | $2.617 billion | $8 million |
| Research and development | $1.991 billion | $1.370 billion |
| Selling, general and administrative | $567 million | $188 million |
| Operating income (loss) | $13.296 billion | $(763) million |
| Net income (loss) | $12.202 billion | $(747) million |
| Diluted earnings (loss) per share | $28.29 | $(1.96) |
| Net cash from operating activities | $13.620 billion | $2.027 billion |
- Revenue increased approximately 2,200% year over year, principally from COVID-19 vaccine sales. All commercial product revenue came from that vaccine.
- Approximate FY2021 gross margin was 85% and operating margin 72%; net margin was 66%. Cost of sales included $641 million in third-party royalties. The company says cost of sales as a share of sales is expected to rise in 2022, reflecting higher manufacturing costs and lower average selling prices, including deliveries to lower-income countries.
- At year-end, cash and cash equivalents were $6.848 billion and investments were $10.722 billion, for approximately $17.6 billion in cash, cash equivalents and investments. Current assets were $16.071 billion; current liabilities were $9.128 billion. Deferred revenue totaled $6.868 billion, including $6.658 billion for product sales, largely customer deposits.
- Total liabilities were $10.524 billion. The filing does not report conventional borrowings in the presented balance sheet; lease liabilities were $916 million, including $764 million of finance lease liabilities. Contractual obligations also include purchase commitments and the Moderna Science Center lease.
- Operating cash flow was $13.620 billion. It included a $2.824 billion increase in deferred revenue and substantial working-capital movements. Capital expenditures were $284 million; investing cash outflow was $8.523 billion, largely reflecting purchases of marketable securities.
Material changes versus FY2020
- Moderna moved from a net loss to $12.2 billion of net income as vaccine sales scaled. FY2020 revenue was $803 million, compared with $18.5 billion in FY2021.
- R&D expense rose 45% to $1.991 billion, mainly from clinical-trial spending, including COVID-19 development; SG&A rose 202% to $567 million as the company expanded commercial and global operations.
- Cash, cash equivalents and investments grew from $5.2 billion to $17.6 billion. Total assets rose to $24.669 billion from $7.337 billion, and stockholders’ equity to $14.145 billion from $2.561 billion.
- The company repurchased 3.5 million shares for $857 million in 2021. The remaining $143 million of the $1 billion authorization was used in January 2022; a new $3 billion repurchase authorization was approved in February 2022.
- The company expanded manufacturing and its workforce; full-time employees more than doubled to approximately 2,700 at year-end.
Outlook, commentary and risks
- At year-end, Moderna had signed COVID-19 vaccine supply agreements of approximately $20.6 billion for deliveries in 2022 and 2023; additional agreements were signed after year-end. Management expected 2022 product sales to be weighted toward the second half as demand becomes more seasonal in an endemic phase. This is management’s outlook, not a guarantee of sales.
- Management expected higher R&D and SG&A expenses in 2022, reflecting pipeline progression, variant and next-generation COVID-19 vaccine work, and continued investment in global commercial capabilities. It stated that year-end financial resources should fund projected operations, capital expenditures and repurchases for at least 12 months after issuance of the statements.
- The COVID-19 vaccine remained the company’s sole commercial product and revenue source. Demand, pricing, competition, variant protection, regulatory decisions, manufacturing scale, supply partners and customer delivery commitments could materially affect results. Some customer prepayments may require refunds if commitments are reduced or doses are not delivered.
- Safety and regulatory risks include ongoing post-marketing evaluation of myocarditis and pericarditis, including concerns about rates in young males, and required post-marketing studies. The FDA had requested more time to assess adolescent use; a lower dose was under evaluation.
- Manufacturing, supply-chain, cold-chain, quality-control and third-party capacity constraints could delay deliveries or clinical programs. The filing notes prior lot failures and a recall of certain vaccine batches shipped to Japan after foreign particulate was found.
- Pipeline execution remains uncertain: most candidates are investigational, and clinical, regulatory, manufacturing, intellectual-property and market-acceptance risks apply. The company also identified cybersecurity, rapid organizational expansion, foreign-exchange, pricing and reimbursement risks.
- There were no material legal proceedings reported. The filing disclosed $2.587 billion of purchase obligations and a $1.051 billion commitment for the Moderna Science Center lease in its contractual-obligations table; subsequent to year-end, it reported an additional $1.9 billion of minimum non-cancelable manufacturing-related purchase obligations.
Most important facts for investors to verify
- Whether the $20.6 billion of year-end supply agreements and subsequent orders convert into timely deliveries, recognized revenue and collected cash; review customer concentration and deferred-revenue terms.
- How 2022 vaccine demand, realized prices, dose mix and lower-income-country deliveries affect revenue and gross margin, especially as sales may become seasonal.
- Whether manufacturing partners, suppliers and logistics providers can meet delivery commitments and maintain product quality, capacity and regulatory compliance.
- Updates on vaccine safety monitoring, FDA/other regulatory decisions, booster and variant efficacy, and the status of pediatric authorizations.
- Whether the broad pipeline advances on schedule and within expected costs, and how much investment and long-term profitability depend on products beyond COVID-19.
- The cash-flow effects of customer deposits, inventory, purchase commitments, leases, share repurchases and the new manufacturing commitments; also assess the concentration of revenue in one product and government-related customers.