Moderna, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. Although the request specifies 2022 Q4, this filing reports full-year results; the supplied text does not provide a complete standalone fourth-quarter income statement or cash-flow summary.
Business context
Moderna is a biotechnology company developing mRNA vaccines and therapeutics across seven modalities. In 2022, its only commercial revenue came from COVID-19 vaccines, including Spikevax and Omicron-targeting boosters. Its pipeline included 48 programs, 38 of which had entered clinical trials. The company’s business is highly dependent on the COVID-19 vaccine market while it works to advance other candidates.
Financial performance and liquidity
| Metric | FY2022 | FY2021 | Change |
|---|---|---|---|
| Total revenue | $19.263 billion | $18.471 billion | +4% |
| COVID-19 vaccine product sales | $18.435 billion | $17.675 billion | +4% |
| Operating income | $9.420 billion | $13.296 billion | -29% |
| Net income | $8.362 billion | $12.202 billion | -31% |
| Diluted EPS | $20.12 | $28.29 | Lower |
| Operating cash flow | $4.981 billion | $13.620 billion | Lower |
Operating margin was approximately 48.9% of revenue and net margin approximately 43.4%. Cost of sales rose to $5.416 billion, or 29% of product sales, from $2.617 billion, or 15%, in 2021. The increase included inventory and purchase-commitment charges, royalties, and underused manufacturing capacity.
Research and development expense increased 65% to $3.295 billion; selling, general and administrative expense doubled to $1.132 billion. Cash, cash equivalents and investments totaled $18.220 billion at year-end, and working capital was $8.508 billion. Total liabilities were $6.735 billion, including $1.073 billion of finance lease liabilities; the filing does not report conventional borrowings as a material debt balance. Management said available financial resources should fund projected operations, capital expenditures and repurchases for at least 12 months from issuance of the financial statements.
Operating cash flow was $4.981 billion; investing cash use was $5.176 billion and financing cash use was $3.448 billion. The company repurchased approximately 23 million shares for $3.329 billion during 2022. Deferred revenue was $2.711 billion at year-end, including $2.626 billion related to product sales; Moderna expected about $2.0 billion of COVID-19 vaccine deliveries associated with deferred revenue in 2023.
Material changes and unusual items
- Revenue rose modestly, but operating income and net income fell substantially as costs increased.
- Cost of sales included $1.3 billion of inventory write-downs and $617 million of losses on firm purchase commitments. The company also recorded a $400 million catch-up royalty payment to NIAID. Third-party royalties and commercial milestone payments associated with product sales totaled $635 million in 2022.
- R&D spending grew, particularly for late-stage RSV, seasonal influenza and CMV trials. SG&A rose as the company expanded commercial and corporate operations.
- Merck paid $250 million for participation in the personalized cancer vaccine collaboration; Moderna recognized the payment as collaboration revenue. AstraZeneca terminated its collaborations, and rights to the VEGF-A and IL-12 programs reverted to Moderna.
- Moderna reported $412 million of unrealized losses on available-for-sale debt securities during 2022; the filing says it did not intend, and did not consider it more likely than not it would need, to sell the securities before recovery.
Outlook, commentary and risks
Management expects COVID-19 vaccine sales to decline in 2023 as the market transitions toward endemic, seasonal demand. It anticipates a more fragmented U.S. customer base, less predictable ordering, greater seasonality, distribution costs, and potentially higher cost of sales as product presentations and demand change. Moderna expected COVID-19 vaccines to remain its only source of commercial revenue in 2023 and forecast higher R&D and SG&A expenses.
Key pipeline milestones cited include planned FDA submission of the RSV candidate for older adults in the first half of 2023, following positive Phase 3 topline results, and plans to begin a Phase 3 study of the personalized cancer vaccine in adjuvant melanoma in 2023. These are forward-looking plans, not approvals or guaranteed outcomes.
Material risks include dependence on COVID-19 vaccine demand; competition, pricing and reimbursement pressure; manufacturing, supply-chain and cold-chain execution; clinical and regulatory uncertainty; safety monitoring obligations; reliance on collaborators and third-party manufacturers; and intellectual-property disputes. Moderna disclosed patent litigation involving Pfizer/BioNTech and claims by Arbutus/Genevant and Alnylam concerning its COVID-19 vaccine. Outcomes are uncertain; the company said it was not party to legal proceedings with a material loss considered probable or reasonably estimable at year-end.
Most important facts for investors to verify
- Whether 2023 COVID-19 demand, seasonality, private-market uptake and realized pricing support management’s revenue expectations.
- Whether inventory write-downs, unused capacity and firm purchase-commitment losses recur, and how these affect cost of sales and margins.
- Progress, safety and regulatory outcomes for RSV, influenza, CMV and personalized cancer vaccine programs, including the timing and terms of any filings or trials.
- Execution and cost of manufacturing commitments, global facility expansion, and the company’s sizable contractual obligations, including purchase commitments and leases.
- Developments in patent litigation, royalty obligations and other legal contingencies; confirm subsequent disclosures because outcomes were uncertain at filing.
The financial statements received an unqualified audit opinion, and management and the auditor reported effective internal control over financial reporting as of December 31, 2022.