# Moderna, Inc. (MRNA) — Narrative, Q3 FY2026 Fiscal year ends December 31. The Business, Risks and annual MD&A sections are drawn from the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (accession 0001682852-26-000033, filed February 20, 2026). The current-quarter and subsequent-events sections are drawn from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 (accession 0001682852-26-000197, filed November 6, 2026) and the third-quarter results release furnished on Form 8-K the same day (accession 0001682852-26-000194, Exhibit 99.1). ## Business Moderna develops, manufactures and sells messenger RNA (mRNA) medicines. Almost all of its revenue comes from respiratory vaccines, overwhelmingly its COVID vaccines. In 2025 it sold Spikevax and mNEXSPIKE (COVID) and mRESVIA (RSV) to commercial customers, mainly U.S. wholesalers and distributors, and to foreign governments and international organizations. Total 2025 revenue was $1.9 billion, and COVID vaccines accounted for $1,810 million of $1,818 million in net product sales. By September 30, 2026 the portfolio had grown to five approved products, adding a flu plus COVID combination vaccine (mCOMBRIAX in the EU, mCOFLU in Canada) and the influenza vaccine mFLUSIVA (approved in the U.S. and Canada for adults 50 and older). The company reports one operating segment. **How it makes money.** Revenue has two parts: - **Net product sales.** These are vaccine sales net of chargebacks, discounts, returns and government rebates. The market is seasonal: demand is concentrated in the fall and winter. In the U.S., its largest market, customers are fragmented and orders are hard to predict. Of 2025 net product sales, $1,165 million came from the U.S., $50 million from Europe and $603 million from the rest of the world. Outside the U.S., the company increasingly sells under long-term strategic partnerships with the governments of the UK, Canada and Australia. Moderna built and runs mRNA plants in each of those countries, and each government has made a multi-year commitment to buy mRNA products from it. - **Other revenue** ($126 million in 2025). This is grant, collaboration, licensing and royalty revenue, plus "stand-ready" manufacturing revenue for keeping those government-partnered plants ready to produce. **Pipeline.** The 10-K describes 35 development programs in three franchises: - **Infectious disease vaccines.** This franchise includes the COVID and RSV vaccines, seasonal flu (mRNA-1010, since approved as mFLUSIVA), flu plus COVID (mRNA-1083), norovirus (mRNA-1403, Phase 3), pandemic H5 flu (mRNA-1018, with Phase 3 funding of up to $54.3 million from CEPI), and latent-virus vaccines for CMV, EBV and HIV. The CMV vaccine failed its Phase 3 study in women of childbearing age in October 2025, and that use was discontinued. Programs for HSV, varicella-zoster, GSD1a and PKU were also discontinued in 2025. - **Oncology.** The lead program is intismeran autogene (mRNA-4157), an individualized neoantigen therapy. A machine-learning algorithm designs it from each patient's tumor sequencing, and it encodes up to 34 neoantigens. Moderna develops it with Merck, and the two share costs and any profits or losses equally worldwide. Moderna received a $200 million upfront payment from Merck under the original 2016 agreement, and Merck paid a $250 million option exercise fee in October 2022. The Merck alliance funds one oncology program; the others are wholly owned or partnered elsewhere. They include mRNA-4359 (a cancer antigen therapy in Phase 1/2 for melanoma and non-small cell lung cancer), mRNA-4106 (Phase 1), mRNA-2808 (a T-cell engager for multiple myeloma), and mRNA-4203 (a cell-therapy enhancer developed with Immatics). - **Rare disease.** The registrational study of mRNA-3927 for propionic acidemia has reached target enrollment. In January 2026 the program was licensed to Recordati, which will lead commercialization while Moderna runs development through approval. Other programs are mRNA-3705 for methylmalonic acidemia and a cystic fibrosis program with Vertex (mRNA-3692/VX-522). **Strategy.** Management names four priorities: 1. Grow sales through geographic expansion and new launches. 2. Cut costs further in 2026 and 2027. 3. Deliver its prioritized pipeline, with as many as six approved infectious-disease vaccines over the next few years, and put the cash those products generate into oncology and rare disease. 4. Keep advancing early-stage programs and the platform. The company has a stated goal of reaching cash breakeven. **Manufacturing.** The Moderna Technology Center in Norwood, Massachusetts makes drug substance. It is being expanded to add commercial drug-product capability, so that mRNA medicines can be made end-to-end in the U.S., with completion targeted for the first half of 2027. A Marlborough, Massachusetts facility was purpose-built for intismeran and began clinical batch supply in September 2025. The plants in the UK, Canada and Australia were fully licensed in 2025. Contract manufacturers provide fill-finish and some raw materials. The company had about 4,700 full-time employees in 18 countries at December 31, 2025. ## Risk factors These are the risks the 10-K and the Q3 10-Q set out that matter most to the investment case: - **Regulatory and policy uncertainty in U.S. vaccines.** The 10-K says changes at U.S. agencies in 2025 have affected, and may keep affecting, demand for Moderna's vaccines and its costs. These include changes in FDA policy and evidentiary expectations, new post-marketing commitments, and CDC/ACIP recommendations on who should be vaccinated. The FDA revoked the COVID vaccine's Emergency Use Authorization in August 2025. In RSV, ACIP recommendations narrower than expected have held back sales. - **Falling COVID demand and dependence on one product line.** In 2025, COVID and RSV vaccines were the only commercial products and RSV sales were minimal. If COVID demand keeps falling, market share is lost, or prices are squeezed, sales will miss projections. The company had net losses of $2.8 billion in 2025 and $3.6 billion in 2024. It has had a loss in every year since inception except 2021 and 2022, and may not achieve sustainable profitability. - **Competition from larger rivals.** Moderna competes with Pfizer and Sanofi in COVID and with Pfizer and GSK in RSV. A competitor's contract with the European Commission, which does not lapse until year-end 2026, has shut Moderna out of many European COVID markets. Larger rivals can bundle products and offer better terms. U.S. private-market discounts, rebates and returns mean realized revenue can be far below list price. The flu market it is entering is well developed, and it may have to offer more favorable terms to win share. - **Executing the near-term plan and cost program.** The company says that if the infectious-disease franchise does not grow as planned, its ability to fund oncology and rare-disease programs may suffer. If cost-efficiency programs fall short, it may miss its cash breakeven goal. - **Drug-pricing policy.** A May 2025 executive order pushed "most-favored-nation" pricing, which would align U.S. prices with those in comparable countries. Reference-pricing efforts, the Inflation Reduction Act's Medicare negotiation program, and reimbursement changes could all cut realized prices in the U.S. and affect pricing and access abroad. - **Clinical and regulatory risk across a shared platform.** All its products rest on the same mRNA and lipid nanoparticle (LNP) technology. A safety problem or technical failure in one program could therefore spread across the whole portfolio. Some mRNA therapies are classified as gene therapies, which can bring a heavier regulatory burden. - **Intellectual property litigation.** The mRNA field is crowded with patent disputes. Moderna is both plaintiff and defendant in proceedings against or brought by Pfizer/BioNTech, CureVac, Northwestern University, Sanofi's Translate Bio units, Bayer/Monsanto and others; it settled its disputes with GSK in October 2026 (see Subsequent events). An adverse ruling could mean large damages, royalties or blocked products. The 2026 settlement with Arbutus/Genevant cost $950 million and could require up to $1.3 billion more depending on a pending appeal (see Current quarter). - **Manufacturing.** Risks include production, release, shelf-life and cold-chain failures, dependence on single-source suppliers, and the complexity of making intismeran one patient at a time. - **Debt.** The November 2025 credit agreement, led by Ares Capital Corporation as administrative agent, is secured by substantially all assets. It carries covenants, including a minimum-cash test, and a default could accelerate the debt. The Q3 10-Q adds new risk factors for the $3.0 billion of 0.00% convertible notes due 2032. These cover: cash needed to settle conversions or repurchase notes on a fundamental change; dilution from conversion; reclassification of the notes as a current liability if conversion is triggered; takeover-deterrent effects of the indenture; and counterparty and market-price effects of the related capped calls. - **Volatile results and share price.** Seasonal demand, inventory write-downs and one-time items make quarterly results swing widely. Other risks named include tariffs and trade policy, export restrictions on mRNA technology, cybersecurity, and the company's use of generative AI. ## Management's discussion — fiscal 2025 From the FY2025 10-K, accession 0001682852-26-000033. The year's results: - **Revenue** fell 40% to $1,944 million. Net product sales fell 42% to $1,818 million on lower COVID volumes in every region. In the U.S., overall COVID demand fell, partly offset by retail share gains after the launch of mNEXSPIKE. In Europe and the rest of the world, government advance-purchase agreements that had added revenue in 2024 were completed, and demand was lower. Partnership sales from the in-country plants partly offset this. Other revenue was roughly flat at $126 million. - **Cost of sales** was $868 million, or 48% of net product sales, against $1,464 million (47%) in 2024. It included $291 million of inventory write-downs, $88 million of third-party royalties and $93 million of unused-capacity and wind-down costs. Write-downs and capacity charges fell from 2024, but so did sales, so the ratio barely changed. - **R&D** fell 31% to $3,132 million as large Phase 3 respiratory trials wound down. Clinical trial costs fell $578 million and clinical manufacturing $239 million, partly offset by more spending on norovirus and oncology. - **SG&A** fell 13% to $1,018 million. - **Net loss** was $2,822 million ($7.26 per share), against $3,561 million ($9.28) in 2024. - **Cash.** Operating cash outflow was $1,873 million. Cash, cash equivalents and investments fell from $9.5 billion to $8.1 billion. That balance included $600 million drawn in November 2025 under a new five-year, $1.5 billion senior secured term loan facility led by Ares Capital Corporation. The facility also has $400 million of delayed-draw capacity available through November 2027 and $500 million available through November 2028, the latter subject to regulatory milestones. It bears interest at Term SOFR plus 5.50%. About 27% of 2025 revenue was in foreign currencies. The 10-K expected product sales to return to growth in 2026, cost of sales to stay roughly flat, R&D to fall modestly and SG&A to hold roughly steady. ## Current quarter — Q3 FY2026 (quarter ended September 30, 2026) From the Q3 FY2026 10-Q, accession 0001682852-26-000197, and the results release, accession 0001682852-26-000194. **Results.** The quarter was profitable as the fall season and the government partnerships drove sales: - **Revenue.** Total revenue rose 29% to $1,313 million. Net product sales rose 31% to $1,273 million: COVID $1,244 million and RSV $29 million. The gain came mainly from COVID vaccine sales in international markets under the long-term government partnerships. Europe's net product sales rose to $314 million from $16 million, and rest-of-world sales were $188 million. U.S. net product sales were $771 million against $782 million a year earlier, which the company called "generally consistent." mFLUSIVA sales were immaterial because it was approved after the 2026–2027 flu contracting season. - **Costs.** Cost of sales was $318 million (24% of product and stand-ready revenue, against 21% a year earlier). It included $65 million of royalties, $54 million of inventory write-downs and $29 million of unused-capacity costs. R&D fell 27% to $583 million on lower late-stage trial spending and lower personnel costs, helped by a $33 million benefit from revised estimates under the Blackstone funding arrangement. SG&A rose 5% to $282 million on higher legal costs. - **Profit.** Operating income was $130 million, against a $260 million loss a year earlier. Net income was $162 million, against a $200 million loss, and diluted EPS was $0.38, against $(0.51). Interest expense was $18 million, against none a year earlier. It relates mainly to the November 2025 term loan, the new convertible notes and finance leases. - **Nine months.** Revenue rose 46% to $1,847 million and the net loss was $1,963 million ($4.93 per share). Cost of sales of $1,366 million included $890 million of royalty expense related to the Arbutus/Genevant settlement and amortization of the related intangible asset. **Legal settlement.** On March 3, 2026, Moderna settled all worldwide litigation with Arbutus Biopharma and Genevant Sciences over Spikevax and mRESVIA. The settlement covers the full infectious-disease portfolio with no future royalties owed. Moderna paid a $950 million lump sum in July 2026. It recorded $876 million in cost of sales in the first quarter and capitalized $74 million as a license intangible. Moderna has appealed a District Court ruling under 28 U.S.C. § 1498 to the Federal Circuit. Depending on the outcome, it could owe up to $1.3 billion more. No accrual has been recorded because a loss is not considered probable. **Product and pipeline milestones in 2026 through September 30:** - **mFLUSIVA (mRNA-1010).** The FDA approved it in August 2026: full approval for ages 50–64 and accelerated approval for 65 and older. Clinical benefit in the older group will be confirmed in a postmarketing trial. U.S. sales began in September 2026 in a limited launch; it is also approved in Canada. Because Moderna has now made its first commercial sale of mFLUSIVA, Blackstone, which committed up to $750 million to fund the flu program, is entitled to low single-digit royalties and up to $750 million in sales milestones on the flu and combination vaccines. - **Flu plus COVID combination vaccine.** The European Commission approved it in April 2026 as mCOMBRIAX, and Canada approved it as mCOFLU. It had not been commercialized as of September 30. Moderna is still awaiting FDA guidance on refiling in the U.S. - **COVID.** The FDA approved the 2026–2027 Spikevax and mNEXSPIKE formulas targeting the XFG subvariant. In September, Moderna signed a five-year COVID vaccine agreement with a local manufacturer in Mexico. - **Intismeran autogene.** In August 2026, the Phase 3 INTerpath-001 trial in resected stage IIB–IV melanoma met its primary endpoint of recurrence-free survival and a key secondary endpoint of distant metastasis-free survival at a pre-specified interim analysis (detailed data in October; see Subsequent events). Moderna and Merck are working toward regulatory submissions. The program now has nine Phase 2 and Phase 3 trials, including three Phase 3 trials in non-small cell lung cancer. - **Norovirus (mRNA-1403).** The Phase 3 interim analysis did not meet the statistical criteria for early success. Moderna will not start another cohort this season and will consult health authorities on next steps. - **Rare disease.** Pivotal data for propionic acidemia (mRNA-3927) are expected in 2026. The Recordati deal closed on March 16, 2026: Moderna received a $50 million upfront payment in the second quarter and is eligible for up to $110 million in development and regulatory milestones, plus commercial milestones and tiered royalties. A decision on starting a pivotal study for methylmalonic acidemia (mRNA-3705) has been deferred until the propionic acidemia readout. **Patent disputes in 2026 through September 30.** In September 2026, the European Patent Office's Technical Board of Appeal revoked Moderna's European Patent No. 3 590 949 in all contracting states. As a result, its infringement cases against Pfizer/BioNTech in Belgium, Ireland and the Netherlands were dismissed, while the German and UK cases await the Board's written decision. Also in September, Moderna sued Pfizer, BioNTech and affiliates in the Hamburg Local Division of the Unified Patent Court on European Patent No. 3 981 437. CureVac filed new infringement complaints against Moderna in the Unified Patent Court in April 2026 and in Barcelona in August 2026. **Financing and liquidity.** Moderna raised fresh capital this quarter: - **Convertible notes.** On September 1, 2026, Moderna issued $3.0 billion of 0.00% Convertible Senior Notes due March 1, 2032, including the initial purchasers' full $400 million option. The initial conversion price is about $210.58 per share, a roughly 47.5% premium to the August 27, 2026 close. The notes initially convert into about 14 million shares, and up to about 21 million in limited circumstances. - **Capped calls.** Related capped calls cost $329 million and cap the dilution offset at about $392.62 per share. After the capped calls and fees, net proceeds were about $2.6 billion. Planned uses include general corporate purposes, investment in oncology growth and debt repayment. - **Liquidity.** Cash, cash equivalents and investments were $7,976 million at September 30, 2026, against $8,135 million at December 31, 2025. They were $6.9 billion at June 30, 2026. The company says the third-quarter increase reflects about $2.6 billion of net note proceeds after the capped calls. That was partly offset by the $950 million Arbutus/Genevant payment and by cash used in operations, including seasonal working capital from third-quarter sales, most of which was still uncollected at quarter-end. Nine-month operating cash outflow was $2,715 million, including a $1.2 billion rise in accounts receivable. - **Term loan.** The $600 million term loan was unchanged at an interest rate of about 9.23%. Moderna was in compliance with the credit agreement's covenants, which include minimum weekly cash of at least $500 million (rising to $750 million if more than $1.0 billion is drawn). - **Buybacks.** No shares were repurchased. $1.7 billion remains under the existing authorization. **2026 outlook (as raised on November 6, 2026):** - **Revenue:** growth of 15% to 25%, up from the earlier outlook of up to 10%, with about half from the U.S. and half from international markets. - **Cost of sales:** about $1.7 billion, including the $0.9 billion one-time litigation settlement charge. - **R&D:** about $2.7 billion, down from about $2.9 billion. - **SG&A:** about $1.0 billion, unchanged. - **Taxes:** negligible. - **Capital expenditures:** about $0.2 billion, against $0.2–0.3 billion before. - **Year-end cash and investments:** $8.1 billion to $8.3 billion, up from $4.7–5.2 billion. The company attributes the increase to better operational execution and the convertible-notes proceeds. The figure excludes any further draws on the roughly $0.9 billion still available under the credit facility. ## Subsequent events These events occurred after the September 30, 2026 quarter end and are disclosed in the Q3 10-Q (accession 0001682852-26-000197), the results release (accession 0001682852-26-000194) and the Form 8-K filed September 30, 2026 (accession 0001193125-26-408289). The 10-Q has no separate subsequent-events note. These filings disclose no acquisition, divestiture or new borrowing after quarter end. - **Chief Operating Officer (effective October 5, 2026).** Juan Andres, who had previously spent nearly six years at Moderna, became Chief Operating Officer, a newly created role that includes leading manufacturing. His appointment was announced on September 30, 2026. Jerh Collins, Ph.D., Chief Technical Operations and Quality Officer, is retiring. - **Securities class action dismissed (October 8 and 13, 2026).** The U.S. District Court for the District of Massachusetts granted Moderna's motion to dismiss the August 2024 putative securities class action, which concerned statements about its RSV vaccine. It then entered an order dismissing the case with prejudice. The decision can be appealed. - **Intismeran Phase 3 data (October 2026).** Detailed INTerpath-001 results were presented at the ESMO Congress 2026. After a median follow-up of 24.6 months, intismeran plus KEYTRUDA cut the risk of recurrence or death by 42% (HR=0.58) and of distant metastasis or death by 38% (HR=0.62) compared with KEYTRUDA alone. Overall survival data are not yet mature. - **New CureVac complaint (October 2026).** CureVac SE sued Moderna affiliates and Lonza in the Swiss Federal Patent Court, asserting European Patent EP'122. - **GSK settlement (October 28, 2026).** Moderna and GSK Biologicals settled all pending U.S. and European patent disputes between them. Each granted the other patent cross-licenses in infectious disease, and neither owes any payment for those licenses. - **Ebola vaccine (November 2026).** mRNA-1469, the bundibugyo ebolavirus vaccine candidate, was recommended to advance into a Phase 2/3 efficacy study in the Democratic Republic of Congo. - **Guidance raised (November 6, 2026).** Moderna raised its 2026 outlook as described above and scheduled an Analyst Day for November 12, 2026.