By: Leroy Leo and Sneha S.K.
(Reuters) – Moderna said on Wednesday that Blackstone’s (NYSE:) life sciences unit will offer $750 million to fund flu vaccine development, bolstering the company’s efforts to advance multiple vaccines as sales of its vaccines plummet. COVID-19 vaccinations.
Moderna (NASDAQ:) is developing several new vaccines, including against cancer and respiratory syncytial virus (RSV), resulting in high research and development costs.
The funding will reduce research and development costs, although Moderna said it still plans to spend about $4.5 billion this year.
“We’re excited about this decision because it ticks all the boxes,” company CFO James Mock said during the company’s 2024 Vaccination Day event. “This allows us to accelerate the implementation of new programs. This allows us to diversify our revenue stream and, frankly, de-risks the influenza program.”
Blackstone Life Sciences will receive commercial milestone payments and low-single-digit royalties on its flu vaccine as part of the agreement, said Moderna, whose only product currently is a COVID-19 shot.
Moderna will also pay Blackstone a prorated royalty for the combination flu and COVID vaccine if it is approved, based on the fair value of the flu component, Mock said.
The company will consider this project financing model for other experimental vaccines if the need arises, he added.
Moderna plans to advance three vaccines to late-stage trials this year, including one against the varicella-zoster virus, which can cause shingles, and another against the pathogen that causes infectious mononucleosis, commonly known as mono.
Moderna shares were up about 2% in afternoon trading.
Sales of Moderna’s COVID shot have fallen sharply from a peak of more than $18 billion in 2022 as pandemic fears fade even as research and development spending remains high. The company, which posted a net loss of $4.7 billion in 2023, projects COVID vaccine sales of $4 billion in 2024.
Moderna plans to launch its RSV vaccine this year in the United States and apply for approval of a flu shot it expects to hit the market in 2025.
The company estimates the overall flu vaccine market will be worth about $7 billion this year, with room for growth as new shots become available. The RSV shot market is expected to reach peak annual sales of $10 billion.
Moderna flu shots produced a stronger immune response against all four strains of influenza A and B compared with traditional flu shots in a late-stage study, according to data published in September.