Moderna's RSV vaccine receives FDA approval as the first RNA vaccine other than COVID-19

The U.S. Food and Drug Administration (FDA) on Friday approved Moderna's respiratory syncytial virus (RSV) vaccine for adults aged 60 and older. This is the company's second product to enter the U.S. market.

Analysts believe that this approval is a victory for Moderna, as the company urgently needs new sources of revenue, as demand for its sole commercial product, the COVID-19 vaccine, is rapidly declining.

It is understood that the approval of Moderna's RSV vaccine is based on late-stage trial results for the elderly, who are more likely to experience severe cases of RSV. According to data from the Centers for Disease Control and Prevention (CDC), the virus causes 6,000 to 10,000 deaths in the elderly each year, and results in 60,000 to 160,000 hospitalizations.

Moderna's vaccine will be sold under the brand name mRESVIA. This is the first RNA vaccine approved for a disease other than COVID-19. The company's RSV vaccine is also the only pre-filled RSV vaccine in a syringe, designed to make it easier for patients to receive the vaccination.

An advisory group from the CDC will vote in June on recommendations for the use of Moderna's vaccine and the target population. Moderna executives stated during a May 1 earnings conference call that the vaccine is expected to receive the same CDC recommendation as the existing RSV vaccines from GlaxoSmithKline (GSK) and Pfizer, competing directly with the two pharmaceutical companies. So far, Pfizer's vaccine has lagged behind GSK in sales, but both vaccines currently generate sales in the hundreds of millions of dollars.

Moderna's full-year sales guidance for 2024 is approximately $4 billion, including revenue from the RSV vaccine.

Analysts believe that this approval demonstrates the diversity of Moderna's messenger RNA platform in treating diseases other than COVID-19. The biotechnology company is leveraging this technology to address a range of different diseases, including RSV, cancer, and a highly contagious gastrointestinal virus - norovirus.

The biotechnology company currently has over 40 products in development, with several in late-stage trials. These products include a combination vaccine for COVID-19 and influenza, which may be approved as early as 2025. Additionally, Moderna is developing a standalone flu vaccine, a personalized cancer vaccine in collaboration with Merck, and vaccines for latent viruses, among other products.

Moderna previously stated that it expects to resume sales growth in 2025 and achieve breakeven in 2026, when new products will be launched.

Investors have high hopes for the long-term potential of Moderna's mRNA product pipeline: the company's stock price has risen by over 60% this year, after falling by nearly 45% in 2023.

However, Wall Street is not convinced about the approval of the RSV vaccine, as Moderna fell 6.24% to $142.03 in midday trading on Friday Analysis suggests that investors are concerned that the effectiveness of the vaccine may not be as high as initially reported by the company, and that a decline in efficacy after eight months may affect its competitiveness.

Data shows that in a phase three trial involving approximately 37,000 people, Moderna's vaccine had an efficacy of 83.7% in preventing at least two symptoms of RSV within about three months. New data released in February this year indicates that the efficacy of the vaccine dropped to 63% at 8.6 months.

Some investors are concerned that the rate of efficacy decline of this vaccine is faster than that of GSK and Pfizer's vaccines. However, Moderna stated in a declaration that without head-to-head trials, comparisons cannot be made