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What changed in Moderna's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Moderna's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+768 added−783 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-23)

Top changes in Moderna's 2024 10-K

768 paragraphs added · 783 removed · 534 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

195 edited+115 added−121 removed263 unchanged
Biggest changeOrphan drug designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic product intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making the product available in the United States for this type of disease or condition will be recovered from sales of the product. 38 Table of Contents If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same indication for seven years from the date of such approval, except in very limited circumstances, such as if the latter product is shown to be clinically superior to the orphan product.
Biggest changeIf a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to 37 Table of Contents market the same drug for the same indication for seven years from the date of such approval, except in very limited circumstances, such as if the latter product is shown to be clinically superior to the orphan product.
OUR STRATEGY We believe that the development of mRNA medicines represents a significant breakthrough for patients, our industry and human health globally. Our success in developing one of the earliest and most effective COVID-19 vaccines, at unprecedented speed and efficiency, demonstrates the promise of mRNA medicine. Our COVID-19 vaccine has helped hundreds of millions of people worldwide combat COVID-19.
OUR STRATEGY We believe that the development of mRNA medicines represents a significant breakthrough for patients, our industry and human health globally. Our success in developing one of the earliest and most effective COVID vaccines, at unprecedented speed and efficiency, demonstrates the promise of mRNA medicine. Our COVID vaccine has helped hundreds of millions of people worldwide combat COVID-19.
In the United States, these laws include, among others: • The Anti-Kickback Statute, which makes it illegal for any person to knowingly and willfully solicit, receive, offer, or pay any remuneration, directly or indirectly, in cash or in kind, that is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug or any other good or service, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. • The federal False Claims Act, which imposes civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities (including manufacturers) for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing, or concealing an obligation to pay money to the federal government. • Health Insurance Portability and Accountability Act of 1996 (HIPAA), which imposes criminal and civil liability for, among other things, knowingly and willfully executing a scheme, or attempting to execute a scheme, to defraud any healthcare benefit program, including private payors, or falsifying, concealing, or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their respective implementing regulations, which impose, among other things, requirements on covered entities and their business associates relating to the privacy and security of individually identifiable health information. 43 Table of Contents • The Physician Payments Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act (ACA), which requires certain pharmaceutical manufacturers with products reimbursed under certain government programs to disclose annually to the federal government (for re-disclosure to the public) certain payments and other transfers of value provided to physicians, teaching hospitals and certain other licensed health care practitioners. • Federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs. • Federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers. • Analogous state fraud and abuse laws and regulations, such as state anti-kickback and false claims laws, which may be broader in scope and apply regardless of payor.
In the United States, these laws include, among others: • The Anti-Kickback Statute, which makes it illegal for any person to knowingly and willfully solicit, receive, offer, or pay any remuneration, directly or indirectly, in cash or in kind, that is intended to induce or reward referrals, including the purchase, recommendation, order or prescription of a particular drug or any other good or service, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. • The federal False Claims Act, which imposes civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities (including manufacturers) for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing, or concealing an obligation to pay money to the federal government. • Health Insurance Portability and Accountability Act of 1996 (HIPAA), which imposes criminal and civil liability for, among other things, knowingly and willfully executing a scheme, or attempting to execute a scheme, to defraud any healthcare benefit program, including private payors, or falsifying, concealing, or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their respective implementing regulations, which impose, among other things, requirements on covered entities and their business associates relating to the privacy and security of individually identifiable health information. • The Physician Payments Sunshine Act, enacted as part of the Patient Protection and Affordable Care Act (ACA), which requires certain pharmaceutical manufacturers with products reimbursed under certain government programs to disclose annually to the 42 Table of Contents federal government (for re-disclosure to the public) certain payments and other transfers of value provided to physicians, teaching hospitals and certain other licensed health care practitioners. • Federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs. • Federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers. • Analogous state fraud and abuse laws and regulations, such as state anti-kickback and false claims laws, which may be broader in scope and apply regardless of payor.
The centralized procedure, which is compulsory for medicines produced by certain biotechnological processes, advanced therapy medicinal products (ATMPs), orphan medicinal products, or those medicines containing a new active substance and intended to treat specific diseases (HIV/AIDS, cancer, neurodegenerative disorders, diabetes, autoimmune and other immune dysfunctions and viral diseases), and optional for those medicines that are highly innovative or contain a new active substance, provides for the grant of a single marketing authorization that is valid throughout the EEA.
The centralized procedure, which is compulsory for medicines produced by certain biotechnological processes, advanced therapy medicinal products (ATMPs), orphan medicinal products, or those medicines containing a new active substance and intended to treat specific diseases (HIV/AIDS, cancer, neurodegenerative disorders, diabetes, autoimmune and other immune dysfunctions and viral diseases), and optional for those medicines that are highly innovative or contain a new active substance, provides for the grant of a single marketing authorization that is valid throughout the EU/EEA.
In addition to the centralized procedure, a marketing authorization can also be obtained in the EEA through a national procedure, which requires a separate application to and approval determination by each country; a decentralized procedure, whereby applicants submit identical applications to several countries and receive simultaneous approval; and a mutual recognition procedure, where applicants submit an application to one country for review and other countries may accept or reject the initial decision.
In addition to the centralized procedure, a marketing authorization can also be obtained in the EU/EEA through a national procedure, which requires a separate application to and approval determination by each country; a decentralized procedure, whereby applicants submit identical applications to several countries and receive simultaneous approval; and a mutual recognition procedure, where applicants submit an application to one country for review and other countries may accept or reject the initial decision.
The primary endpoints are safety and pharmacokinetics and pharmacodynamics. Secondary endpoints include incidence and severity of adverse events (AEs) and change in plasma biomarkers: methylcitric acid (2-MC) and 3-Hydroxypropionic acid (3-HP). We have received Rare Pediatric Disease Designation, Orphan Drug Designation and Fast Track Designation from the FDA and Orphan Designation from the European Commission for the PA program.
The primary endpoints are safety, pharmacokinetics and pharmacodynamics. Secondary endpoints include incidence and severity of adverse events and change in plasma biomarkers: methylcitric acid (2-MC) and 3-Hydroxypropionic acid (3-HP). We have received Rare Pediatric Disease Designation, Orphan Drug Designation and Fast Track Designation from the FDA and Orphan Designation from the European Commission for the PA program.
Our website, www.modernatx.com, including the Investor Relations section, www.investors.modernatx.com; corporate blog www.modernatx.com/moderna-blog, and our Statements and Perspectives webpage, https://investors.modernatx.com/Statements--Perspectives/default.aspx; as well as our social media channels: Facebook, www.facebook.com/modernatx; X, www.twitter.com/moderna_tx; and LinkedIn, www.linkedin.com/company/modernatx; contain a significant amount of information about us, including financial and other information for investors.
Our website, www.modernatx.com, including the Investor Relations section, www.investors.modernatx.com; corporate blog www.modernatx.com/moderna-blog, and our Statements and Perspectives webpage, https://investors.modernatx.com/Statements--Perspectives/default.aspx; as well as our social media channels: Facebook, www.facebook.com/modernatx; X, www.x.com/moderna_tx; and LinkedIn, www.linkedin.com/company/modernatx; contain a significant amount of information about us, including financial and other information for investors.
We have implemented measurement tools and metrics to monitor, measure, and analyze these practices to support cGMP operations, achieve planned results, and support continuous improvement. We monitor these quality metrics through formal governance processes, including Quality Management Review (QMR), to enable continuous improvement. We have also established an independent Quality Unit that fulfills quality assurance and quality control responsibilities.
We have implemented tools and metrics to monitor, measure, and analyze these practices to support cGMP operations, achieve planned results, and support continuous improvement. We monitor these quality metrics through formal governance processes, including Quality Management Review (QMR), to enable continuous improvement. We have also established an independent Quality Unit that fulfills quality assurance and quality control responsibilities.
From 2000 to 2015, a total of $562.6 billion globally was spent on care, treatment and prevention of HIV, representing a significant economic burden. We are developing two HIV vaccine candidates—mRNA-1644 and mRNA-1574—both of which are in ongoing Phase 1 clinical trials.
From 2000 to 2015, a total of $562.6 billion globally was spent on care, treatment and prevention of HIV, representing a significant economic burden. We are developing two HIV vaccine candidates—mRNA-1644 and mRNA-1574—both of which are in Phase 1 clinical trials.
Effective since January 2022, the Clinical Trials Regulation (No. 536/2014) aims to streamline and harmonize the procedures for assessment and governance of clinical trials throughout the EU and to require that information on the authorization, conduct and results of each clinical trial conducted in the EU be publicly available.
Effective since January 2022, the Clinical Trials Regulation (EC) No. 536/2014 aims to streamline and harmonize the procedures for assessment and governance of clinical trials throughout the EU and to require that information on the authorization, conduct and results of each clinical trial conducted in the EU be publicly available.
EBV infection is also associated with the development and progression of certain lymphoproliferative disorders, cancers and autoimmune diseases. In particular, EBV infection and infectious mononucleosis are associated with increased risk of developing multiple sclerosis, an autoimmune disease of the central nervous system.
EBV infection is also associated with the development and progression of certain lymphoproliferative disorders, cancers and autoimmune diseases. In particular, EBV infection and infectious mononucleosis are associated with increased risk of developing multiple sclerosis (MS), an autoimmune disease of the central nervous system.
Review and approval process In the EEA, in order to obtain a marketing authorization from the applicable regulatory authority, a company may submit marketing authorization applications either under a centralized or decentralized procedure.
Review and approval process In the EU/EEA, in order to obtain a marketing authorization from the applicable regulatory authority, a company may submit marketing authorization applications either under a centralized or decentralized procedure.
For example, these patents and patent applications include claims directed to: • mRNA chemistry imparting improved properties for vaccine and therapeutic uses; • methods for mRNA sequence optimization to enhance the levels and fidelity of proteins expressed from our mRNA medicines; • methods for identifying epitopes having superior suitability in cancer vaccine contexts; • engineering elements tailored to enhance stability and the in vivo performance of mRNA medicines; • LNP delivery systems, including novel lipid components designed for optimal delivery and expression of both therapeutic and vaccine nucleic acids, in particular, prophylactic infectious disease and cancer vaccine nucleic acids, intratumoral immuno-oncology therapeutics, local regenerative therapeutics, systemic therapeutics, and inhaled pulmonary therapeutics; and • innovative processes for the manufacture and analysis of mRNA drug substance and formulated drug product.
For example, these patents and patent applications include claims directed to: • mRNA chemistry imparting improved properties for vaccine and therapeutic uses; • methods for mRNA sequence optimization to enhance the levels and fidelity of proteins expressed from our mRNA medicines; • methods for identifying epitopes having superior suitability in cancer vaccine contexts; • engineering elements tailored to enhance stability and the in vivo performance of mRNA medicines; 29 Table of Contents • LNP delivery systems, including novel lipid components designed for optimal delivery and expression of both therapeutic and vaccine nucleic acids, in particular, prophylactic infectious disease and cancer vaccine nucleic acids, intratumoral immuno-oncology therapeutics, local regenerative therapeutics, systemic therapeutics, and inhaled pulmonary therapeutics; and • innovative processes for the manufacture and analysis of mRNA drug substance and formulated drug product.
While the NIH Guidelines are only mandatory for research being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them. 37 Table of Contents Foreign studies conducted under an IND must meet the same requirements that apply to studies being conducted in the United States.
While the NIH Guidelines are only mandatory for research being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them. 36 Table of Contents Foreign studies conducted under an IND must meet the same requirements that apply to studies being conducted in the United States.
Follow-on projects, which could bring total potential funding under the framework agreement up to $100 million (including the HIV antibody project) to support the development of additional mRNA projects for various infectious diseases, can be proposed and approved until the sixth anniversary of the framework agreement, subject to the terms of the framework agreement, including our obligation to grant to the Bill & Melinda Gates Foundation certain non-exclusive licenses.
Follow-on projects, which could bring total potential funding under the framework agreement up to $100 million (including the HIV antibody project) to support the development of additional mRNA projects for various infectious diseases, can be proposed and approved until the sixth anniversary of the framework agreement, subject to the terms of the framework agreement, including our obligation to grant to the Gates Foundation certain non-exclusive licenses.
European orphan designation and exclusivity Orphan drug designation is available in the EU to promote the development of products that are intended for the diagnosis, prevention, or treatment of life threatening or chronically debilitating conditions affecting not more than five in 10,000 persons in the EU community, or where it is unlikely that the development of the medicine would generate sufficient return to justify the necessary investment in its development, and in each case for which no satisfactory method of diagnosis, prevention, or treatment has been 41 Table of Contents authorized (or, if a method exists, the product would be a significant benefit to those affected).
European orphan designation and exclusivity Orphan drug designation is available in the EU to promote the development of products that are intended for the diagnosis, prevention, or treatment of life threatening or chronically debilitating conditions affecting not more than five in 10,000 persons in the EU community, or where it is unlikely that the development of the medicine would generate sufficient return to justify the necessary investment in its development, and in each case for which no satisfactory method of diagnosis, prevention, or treatment has been authorized (or, if a method exists, the product would be a significant benefit to those affected).
Proprietary methods around the making and therapeutic use of our INTs and resulting vaccine compositions are described and claimed in seven pending U.S. patent applications, six pending European patent applications, five pending patent applications in Japan, three pending patent applications and one granted patent in China, and several pending patent applications in New Zealand, South Africa, Asian and South American countries, as well as one PCT application.
Proprietary methods around the making and therapeutic use of our INTs and resulting vaccine compositions are described and claimed in one granted U.S. patent, eight pending U.S. patent applications, six pending European patent applications, one granted patent and five pending patent applications in Japan, three pending patent applications and one granted patent in China, and several pending patent applications in New Zealand, South Africa, Asian and South American countries, as well as one PCT application.
These include our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, and amendments to those reports. The SEC also maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC. 45 Table of Contents
These include our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, and amendments to those reports. The SEC also maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC. 44 Table of Contents
Manufacturing technology development To support our broad pipeline of products, which span multiple therapeutic areas and routes of administration, our platform research and technical development teams closely collaborate to facilitate rapid and seamless clinical translation of scientific breakthroughs. This enables us to develop potential medicines to serve a broad patient population.
Manufacturing technology development To support our broad pipeline of products, which spans multiple therapeutic areas and routes of administration, our platform research and technical development teams closely collaborate to facilitate rapid and seamless clinical translation of scientific breakthroughs. This enables us to develop potential medicines to serve a broad patient population.
The Bill & Melinda Gates Foundation has committed up to $20 million in grant funding to support our initial project related to the evaluation of antibody combinations in a preclinical setting as well as the conduct of a first-in-human Phase 1 clinical trial of a potential mRNA medicine to help prevent HIV infections.
The Gates Foundation has committed up to $20 million in grant funding to support our initial project related to the evaluation of antibody combinations in a preclinical setting as well as the conduct of a first-in-human Phase 1 clinical trial of a potential mRNA medicine to help prevent HIV infections.
The current patent portfolio contains both compositions of matter and methods of treating subjects using the vaccine. In the U.S., our CMV vaccine is covered by multiple issued U.S. patents of differing breadth. Each family has counterparts consisting of pending applications and issued patents in non-U.S. jurisdictions, including Europe and Japan.
The current patent portfolio contains both compositions of matter and methods of treating subjects using the vaccine. In the U.S., our CMV vaccine is covered by multiple issued U.S. patents of differing breadth. Each family has counterparts consisting of pending applications and issued patents in non-U.S. jurisdictions, including, in some cases, Europe and Japan.
We continually monitor employee turnover rates, as our success depends upon retaining our highly trained personnel. We believe that the competitive compensation we offer, along with the combination of the factors listed above, among other factors, have helped reduce voluntary turnover. In 2023, our voluntary turnover rate was approximately 6%.
We continually monitor employee turnover rates, as our success depends upon retaining our highly trained personnel. We believe that the competitive compensation we offer, along with the combination of the factors listed above, among other factors, have helped reduce voluntary turnover. In 2024, our voluntary turnover rate was approximately 6%.
Similar to the United States, the various phases of preclinical and clinical research in the EU are subject to significant regulatory controls.
Similar to the United States, the various phases of preclinical and clinical research in the EU/EEA are subject to significant regulatory controls.
We believe that our employees are highly engaged, and our company and team have been publicly recognized for our leadership, innovation and good corporate citizenship. Science magazine ranked us as a top employer for each of the last nine years.
We believe that our employees are highly engaged, and our company and team have been publicly recognized for our leadership, innovation and good corporate citizenship. Science magazine ranked us as a top employer for each of the last ten years.
Multisystemic complications include neurological manifestations, cardiomyopathy, arrythmias, growth retardation, recurrent pancreatitis, bone marrow suppression and predisposition to infection. Long-term, insults by toxic metabolites cause complications in various organs, and cognitive outcome is 20 Table of Contents negatively correlated with the number of MDEs. Currently, there is no approved therapy for PA that targets the underlying root cause of the disease.
Multisystemic complications include neurological manifestations, cardiomyopathy, arrythmias, growth retardation, recurrent pancreatitis, bone marrow suppression and predisposition to infection. Long-term, insults by toxic metabolites cause complications in various organs, and cognitive outcome is negatively correlated with the number of MDEs. Currently, there is no approved therapy for PA that targets the underlying root cause of the disease.
We have developed proprietary bioinformatics designed algorithms linked to an automated manufacturing process for rapid production of formulated mRNA, with a typical turnaround time of a few weeks. We have operationalized INT manufacturing at the MTC campus to meet our Phase 1 and 2 pipeline supply needs by using single-use systems with fast “needle-to-needle” turnaround times.
We have developed proprietary bioinformatics designed algorithms linked to an automated manufacturing process for rapid production of formulated 24 Table of Contents mRNA, with a typical turnaround time of a few weeks. We have operationalized INT manufacturing at the MTC campus to meet our Phase 1 and 2 pipeline supply needs by using single-use systems with fast “needle-to-needle” turnaround times.
As a result, obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of our products on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.
As a result, obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of 41 Table of Contents our products on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.
We plan to continue to identify potential strategic collaborators who can contribute meaningful technology and insights to our programs and allow us to more rapidly expand our impact to broader patient populations. Below are brief descriptions of certain of our ongoing collaborations.
We may continue to identify potential strategic collaborators who can contribute meaningful technology and insights to our programs and allow us to expand our impact more rapidly to broader patient populations. Below are brief descriptions of certain of our ongoing collaborations.
NiV has been identified as the cause of isolated outbreaks in India, Bangladesh, Malaysia and Singapore since 2000 and is included on the WHO R&D Blueprint list of epidemic threats needing urgent R&D action.
NiV has been identified as the cause of isolated outbreaks in India, Bangladesh, Malaysia and Singapore since 2000 and is included on the WHO R&D Blueprint list of epidemic threats needing urgent research and development action.
Most of the patents and applications (if issued) in our portfolio will not expire until 2033 at the earliest. Any patent that may issue from our most recently filed patent applications is projected to expire between 2042 and 2043, at the earliest.
Most of the patents and applications (if issued) in our portfolio will not expire until 2033 at the earliest. Any patent that may issue from our most recently filed patent applications is projected to expire between 2043 and 2044, at the earliest.
On March 17, 2020, the Secretary of HHS issued a declaration under the PREP Act and has issued subsequent amendments thereto to provide liability immunity for activities related to certain countermeasures against COVID-19. While we believe our products sold to the U.S. Government would be covered under the provisions of the PREP Act, this cannot be assured.
On March 17, 2020, the Secretary of HHS issued a declaration under the PREP Act and has issued subsequent amendments thereto to provide liability immunity for activities related to certain countermeasures against COVID-19. While we believe our products sold to the U.S. Government will continue to be covered under the provisions of the PREP Act, this cannot be assured.
In collaboration with the International AIDS Vaccine Initiative (IAVI) and the Bill & Melinda Gates Foundation, mRNA-1644 is testing a novel HIV vaccine strategy in humans as delivered by mRNA to elicit broadly neutralizing HIV-1 antibodies (bnAbs) through sequential vaccination of novel prime and boost antigens that induce specific B-cell responses.
In collaboration with the International AIDS Vaccine Initiative (IAVI), NIAID and the Gates Foundation, mRNA-1644 is testing a novel HIV vaccine strategy in humans as delivered by mRNA to elicit broadly neutralizing HIV-1 antibodies (bnAbs) through sequential vaccination of novel prime and boost antigens that induce specific B-cell responses.
(including granted European patents that have been validated in numerous European countries) covering certain of our proprietary platform technology, inventions and improvements, and covering key aspects of our clinical and most advanced development candidates. We have over 400 additional pending patent applications that, in many cases, are counterparts to the foregoing U.S. and foreign patents.
(including granted European patents that have been validated in numerous European countries) covering certain of our proprietary platform technology, inventions and improvements, and covering key aspects of our clinical and most advanced development candidates. We have 700 additional pending patent applications that, in many cases, are counterparts to the foregoing U.S. and foreign patents.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the European Union do not follow price structures of the United States and generally prices tend to be significantly lower.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the EU do not follow price structures of the United States and generally prices tend to be significantly lower.
The global Phase 1/2 clinical trial for mRNA-3927, the Paramount Study, is ongoing and we have fully enrolled all five dose optimization cohorts, as well as a dose confirmation cohort. The objective of the study is to evaluate the safety and pharmacology of mRNA-3927 in patients 1 year of age and older with PA.
The global Phase 1/2 clinical trial for mRNA-3927, the Paramount Study, is ongoing and we have fully enrolled all five dose optimization cohorts, as well as a dose confirmation cohort. The objective of the study is to evaluate the safety and pharmacology of mRNA-3927 in patients aged one year and older with PA.
We believe that the integrated AI ecosystem we are building at Moderna will accelerate our mission to deliver the greatest possible impact to people through mRNA medicines. COMMERCIAL We are building a differentiated commercial model, with active commercial subsidiaries in key markets across North America, Europe and the Asia-Pacific region.
We believe that the integrated AI ecosystem we are building at Moderna will accelerate our mission to deliver the greatest possible impact to people through mRNA medicines. COMMERCIAL We continue to build our differentiated commercial model, with active commercial subsidiaries in key markets across North America, Europe and the Asia-Pacific region.
In addition, the federal government, state legislatures, and foreign governments have shown significant interest in implementing cost containment programs, including price-controls and price transparency, 44 Table of Contents restrictions on reimbursement, and requirements for substitution of generic products for branded prescription drugs to limit the growth of government paid health care costs.
In addition, the federal government, state legislatures, and foreign governments have shown significant interest in implementing cost containment programs, including price-controls and price transparency, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription drugs to limit the growth of government paid health care costs.
EBV vaccine (mRNA-1189 and mRNA-1195) Epstein-Barr virus (EBV) is a member of the herpesvirus family that is related to CMV and infects approximately 90% of people in the U.S. by adulthood, with primary infection typically occurring during childhood or late adolescence (approximately 50% and 89% seropositivity, respectively).
EBV vaccine (mRNA-1189 and mRNA-1195) Epstein-Barr virus (EBV) is a member of the herpesvirus family that infects approximately 90% of people in the U.S. by adulthood, with primary infection typically occurring during childhood or late adolescence (approximately 50% and 89% seropositivity, respectively).
Our MMA therapy candidate, mRNA-3705, encodes for a missing or deficient hepatic enzyme. In an ongoing Phase 1/2 study, fifteen participants have been dosed. Thus far, all eligible participants have opted to participate in the Open-Label Extension study. To date, mRNA-3705 has generally been well-tolerated with no discontinuations due to safety or meeting protocol defined dose limiting toxicity criteria.
Our MMA therapy candidate, mRNA-3705, encodes for a missing or deficient hepatic enzyme. In an ongoing Phase 1/2 study, fifteen participants have been dosed. Thus far, all eligible participants have opted to participate in the Open-Label Extension study. To date, mRNA-3705 was generally well-tolerated to date with no discontinuations due to safety and no events meeting protocol-defined dose-limiting toxicity criteria.
The Bill & Melinda Gates Foundation In January 2016, we entered a global health project framework agreement with the Bill & Melinda Gates Foundation to advance mRNA development projects for various infectious diseases.
The Gates Foundation In January 2016, we entered a global health project framework agreement with the Bill & Melinda Gates Foundation (n/k/a the Gates Foundation) to advance mRNA development projects for various infectious diseases.
Applying our understanding of the basic science underlying each step in the manufacturing process, we have designed proprietary manufacturing processes to impart desirable pharmacologic features, for example increasing potency in a vaccine. 10 Table of Contents LNP manufacturing process: Improving pharmacology: Our platform technology includes synthetic processes to produce LNPs.
Applying our understanding of the basic science underlying each step in the manufacturing process, we have designed proprietary manufacturing processes to impart desirable pharmacologic features, for example increasing potency in a vaccine. LNP manufacturing process: Improving pharmacology: Our platform technology includes synthetic processes to produce LNPs.
We have made equity investments in Carisma, Generation Bio and Metagenomi pursuant to those collaborations. 28 Table of Contents Strategic alliances with government organizations and foundations Defense Advanced Research Projects Agency (DARPA) In September 2020, we entered into an agreement with DARPA to fund development of a mobile manufacturing prototype leveraging our existing manufacturing technology that is capable of rapidly producing vaccines and therapeutics.
We have made equity investments in Carisma and Generation Bio pursuant to those collaborations. Strategic alliances with government organizations and foundations Defense Advanced Research Projects Agency (DARPA) In September 2020, we entered into an agreement with DARPA to fund development of a mobile manufacturing prototype leveraging our existing manufacturing technology that is capable of rapidly producing vaccines and therapeutics.
Pediatric investigation plan An application for marketing authorization of a medicinal product for human use that is not yet authorized in the EU must include a Pediatric Investigational Plan (PIP) pursuant to the regulation on medicinal products for pediatric use (known as the Paediatric Regulation), unless a waiver applies.
Pediatric investigation plan An application for marketing authorization of a medicinal product for human use that is not yet authorized in the EU must include a Pediatric Investigational Plan (PIP) pursuant to the Regulation No. 1901/2006 on medicinal products for pediatric use (known as the Paediatric Regulation), unless a waiver applies.
Please refer to our 2022 ESG Report under the “Responsibility—Corporate policies” section of our website, which can be found at www.modernatx.com/responsibility/corporate-policies, as well as our proxy statement related to our 2024 Annual Meeting of Stockholders that we will file with the SEC, for a description of some of the measures we have taken to progress our commitment to corporate social responsibility.
Please refer to our 2023 ESG Report under the “Responsibility—Corporate policies” section of our website, which can be found at www.modernatx.com/responsibility/corporate-policies, as well as our proxy statement related to our 2025 Annual Meeting of Stockholders that we will file with the SEC, for a description of some of the measures we have taken to progress our commitment to corporate social responsibility.
Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which drugs and treatments they will cover and the amount of reimbursement. 42 Table of Contents In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors.
Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which drugs and treatments they will cover and the amount of reimbursement. In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors.
GSD1a occurs in approximately 1:100,000 live births in the United States and European Union but is more common in Ashkenazi Jews where the incidence is reported to be 1:20,000 live births. There are an estimated 2,500 people in the United States and over 4,000 people in the European Union with GSD1a.
GSD1a occurs in approximately 1:100,000 live births in the United States and the EU but is more common in Ashkenazi Jews where the incidence is reported to be 1:20,000 live births. There are an estimated 2,500 people in the United States and over 4,000 people in the EU with GSD1a.
We have therefore invested heavily in delivery science and have developed LNP technologies to enable delivery of larger quantities of mRNA to target tissues. LNPs are generally composed of four components: an amino lipid, a phospholipid, cholesterol, and a pegylated-lipid (PEG-lipid).
We have therefore invested heavily in delivery science and have developed LNP technologies to enable delivery of larger quantities of mRNA to target tissues. 9 Table of Contents LNPs are generally composed of four components: an amino lipid, a phospholipid, cholesterol, and a pegylated-lipid (PEG-lipid).
We are developing two EBV vaccine candidates—a vaccine to prevent infectious mononucleosis (mRNA-1189) and a vaccine to prevent the longer-term sequelae of EBV infection (mRNA-1195).
We are developing two EBV vaccine candidates—a vaccine to prevent infectious mononucleosis (mRNA-1189) and a vaccine to prevent or treat the longer-term sequelae of EBV infection (mRNA-1195).
We also seek to partner with and invest in companies developing other types of therapeutics, such as gene editing and cell-therapy, where we believe we can leverage our core mRNA and LNP capabilities to expand the reach of our technology.
From time to time, we also partner with and invest in companies developing other types of therapeutics, such as gene editing and cell-therapy, where we believe we can leverage our core mRNA and LNP capabilities to expand the reach of our technology.
We operate in a highly competitive environment for talent, particularly as we seek to attract and retain talent with experience in the biotechnology and pharmaceutical sectors. Our workforce is highly educated, and as of December 31, 2023, 41% of our employees hold Ph.D., Doctorate, M.D., J.D. or Master’s degrees. Among our employees, as of December 31, 2023, 49% are female.
We operate in a highly competitive environment for talent, particularly as we seek to attract and retain talent with experience in the biotechnology and pharmaceutical sectors. Our workforce is highly educated, and as of December 31, 2024, 43% of our employees hold Ph.D., Doctorate, M.D., J.D. or Master’s degrees. Among our employees, as of December 31, 2024, 49% are female.
We design microRNA binding sites into 9 Table of Contents the 3’-UTR of our potential mRNA medicines so that if our mRNA is delivered to cells with such microRNAs, it will be minimally translated and rapidly degraded.
We design microRNA binding sites into the 3’-UTR of our potential mRNA medicines so that if our mRNA is delivered to cells with such microRNAs, it will be minimally translated and rapidly degraded.
We file additional U.S. and foreign patent applications as necessary to protect our evolving intellectual property positions. 29 Table of Contents We also rely on trademarks, copyright, trade secrets and know-how relating to our proprietary technology and programs, continuing innovation, and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of mRNA therapeutic and vaccine technologies.
We file additional U.S. and foreign patent applications in key markets as necessary to protect our evolving intellectual property positions. We also rely on trademarks, copyright, trade secrets and know-how relating to our proprietary technology and programs, continuing innovation, and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of mRNA therapeutic and vaccine technologies.
European regulatory data protection In the EU, new innovative products authorized for marketing (i.e., reference products) qualify for regulatory data protection consisting of eight years of data exclusivity and an additional two years of market protection upon the grant of a marketing authorization.
European regulatory data protection In the EU, new innovative products authorized for marketing qualify for regulatory data protection consisting of eight years of data exclusivity and an additional two years of market protection upon the grant of a marketing authorization.
U.S. drug and biological product development In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (FDCA) and its implementing regulations and biologics under the FDCA, the Public Health Service Act (PHSA), and their implementing regulations. Both drugs and biologics also are subject to other federal, state and local statutes and regulations.
U.S. drug and biological product development In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (FDCA) and biologics under the FDCA, the Public Health Service Act (PHSA), each in conjunction with their implementing regulations. Both drugs and biologics also are subject to other federal, state and local statutes and regulations.
Additionally, in 2023, Biospace ranked us the number one large employer in its 2024 Best Places to Work in Biopharma report for the third consecutive year. We also received a perfect score from the Human Rights Campaign's Equality Index for 2023-2024. We measure employee engagement through a vendor-supplied engagement software, using validated external benchmarks to track employee engagement factors.
Additionally, in 2024, Biospace ranked us the number one large employer in its 2025 Best Places to Work in Biopharma report for the fourth consecutive year. We also received a perfect score from the Human Rights Campaign's Corporate Equality Index for 2025. We measure employee engagement through a vendor-supplied engagement software, using validated external benchmarks to track employee engagement factors.
Supply for Late-Stage Development and Commercialization As we continue to manufacture our COVID-19 vaccines, our development pipeline continues to advance to later-stage development and towards commercialization. Our platform approach allows us to continue to evolve our manufacturing suites and other capabilities at our manufacturing facilities. mRNA manufacturing is flexible and one plant can manufacture multiple vaccines and therapeutics.
Supply for Late-Stage Development and Commercialization Our development pipeline continues to advance to later-stage development and towards commercialization. Our platform approach allows us to continue to evolve our manufacturing suites and other capabilities at our manufacturing facilities. mRNA manufacturing is flexible and one plant can manufacture multiple vaccines and therapeutics.
Our manufacturing facilities also permit us to manufacture products in parallel. For instance, we can produce drug substance and drug product for our Phase 3 CMV clinical trial while manufacturing COVID-19 drug substance in the same facilities. 25 Table of Contents Quality Unit Quality is core to the way we operate.
Our manufacturing facilities also permit us to manufacture products in parallel. For instance, we can produce drug substance and drug product for our Phase 3 CMV clinical trial while manufacturing COVID-19 drug substance in the same facilities. Quality Unit Quality is core to the way we operate.
This period may be reduced to six years if, at the end of the fifth year, it is established that the orphan drug designation criteria are no longer met.
This period may be 40 Table of Contents reduced to six years if, at the end of the fifth year, it is established that the orphan drug designation criteria are no longer met.
For example, the European Union provides options for its Member States to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
For example, the EU provides options for its Member States to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
EBV is the major cause of infectious mononucleosis, accounting for over 90% of the approximately one to two million cases in the U.S. each year. Infectious mononucleosis can debilitate patients for weeks to months and, in some cases, can lead to hospitalization due to complications such as splenic rupture.
EBV is the major cause of infectious mononucleosis, accounting for over 90% of the cases in the U.S. each year. Infectious mononucleosis can debilitate patients for weeks to months and, in some cases, can lead to hospitalization due to complications such as splenic rupture.
Our growing commercial footprint provides us with local commercial teams in major markets where respiratory vaccines have high utilization rates and sales. To support the build out of our commercial activities in markets around the globe, we have hired talent with extensive pharmaceutical company experience.
Our commercial footprint provides us with local commercial teams in major markets where respiratory vaccines have high utilization rates and sales. To support the build out of our commercial activities in markets worldwide, we have hired talent with extensive pharmaceutical company experience.
This group of programs include infectious diseases such as flaviviruses such as Zika and dengue 31 Table of Contents viruses, HIV, Nipah virus, and the Mpox virus. In addition, programs are ongoing in many bacterial diseases.
This group of programs include infectious diseases such as flaviviruses such as Zika and dengue viruses, HIV, Nipah virus, and the Mpox virus. In addition, programs are ongoing in many bacterial diseases.
Our CMV vaccine candidate, mRNA-1647, combines six mRNAs in one vaccine, which encode for two proteins located on the surface of CMV: five mRNAs encode the subunits that form the membrane-bound pentamer complex and one mRNA encodes the full-length membrane-bound glycoprotein B (gB).
Our CMV vaccine candidate, mRNA-1647, combines six mRNAs in one vaccine. These six mRNAs encode proteins located on the surface of CMV: five mRNAs encode the subunits that form the membrane-bound pentamer complex and one mRNA encodes the full-length membrane-bound glycoprotein B (gB).
Each novel delivery system is a new application, which we call a “modality.” While the programs within a modality may target diverse diseases, they share similar mRNA characteristics and manufacturing processes to achieve shared product features.
Each novel delivery system is a new application, called a “modality.” While the programs within a modality may target diverse diseases, they share similar mRNA characteristics and manufacturing processes to achieve shared product features.
In September 2022, Merck exercised its option for personalized cancer vaccines, including mRNA-4157, pursuant to the terms of our existing PCV Collaboration and License Agreement with Merck, which was amended and restated in 2018 (PCV Agreement).
In September 2022, Merck exercised its option for personalized cancer vaccines, including mRNA-4157, pursuant to the terms of our existing PCV Collaboration and License Agreement with Merck, which was amended and restated in 2018 (PCV Agreement, also referred to as the INT Agreement).
Our INT, mRNA-4157, uses next generation sequencing and our proprietary algorithm to design an mRNA that encodes up to 34 neoantigens against each individual patient’s tumor mutations with specificity to their HLA type, and is predicted to elicit both class I (CD8) and class II (CD4) responses.
Our INT, mRNA-4157, uses next generation sequencing and a machine-learning based algorithm to design an mRNA that encodes up to 34 neoantigens against each individual patient’s tumor mutations with specificity to their HLA type, and is predicted to elicit both class I (CD8) and class II (CD4) responses.
Latent vaccines We have vaccine programs and patent applications directed to both the acute and latent forms of diseases caused by various viruses, including CMV, EBV, HSV, VZV and HIV, using both preventative vaccines targeting the acute phase and therapeutic vaccines for treating the latent diseases in those who do become infected.
Latent vaccines We have vaccine programs and patent applications directed to diseases caused by various latent viruses, including CMV, EBV, HSV and VZV, in some cases, using both preventative vaccines targeting the acute phase and therapeutic vaccines for treating the latent diseases in those who do become infected.
These insights have allowed us to make significant improvements in the efficiency of our processing and the potency of our LNPs. OUR MODALITIES Our vision for harnessing the power of mRNA through modalities Within our platform, we invest in science to invent novel ways to deliver mRNA into various cell types.
These insights have allowed us to make significant improvements in the efficiency of our processing and the potency of our LNPs. 10 Table of Contents Harnessing the power of mRNA through modalities Within our platform, we invest in science to invent novel ways to deliver mRNA into various cell types.
Pursuant to the agreement, we have agreed to pay low single-digit royalties on future net sales, a minimum annual royalty payment and certain contingent development, regulatory and commercial milestone payments on a licensed product-by-licensed product basis. Formulation technology in-licenses Our development candidates use internally developed formulation technology that we own.
Pursuant to the agreement, we have agreed to pay tiered, low-to-mid single-digit royalties on net sales of our RSV vaccine, a minimum annual royalty payment, and certain contingent development, regulatory and commercial milestone payments on a licensed product-by-licensed product basis. Formulation technology in-licenses Our development candidates use internally developed formulation technology that we own.
With respect to our IP estate, our solely-owned patent portfolio consists of more than 230 issued or allowed U.S. patents or patent applications and more than 170 granted or allowed patents in jurisdictions outside of the U.S.
With respect to our IP estate, our solely-owned patent portfolio consists of more than 260 issued or allowed U.S. patents or patent applications and more than 140 granted or allowed patents in jurisdictions outside of the U.S.
Infectious disease vaccines: Public health vaccines Zika vaccine (mRNA-1893) The Zika virus is a single stranded RNA virus of the Flaviviridae family. Seroepidemiology data suggest that it is endemic to regions of Africa and Asia, where the Aedes mosquito vectors are found.
Public health vaccines Zika vaccine (mRNA-1893) The Zika virus is a single stranded RNA virus of the Flaviviridae family. Sero-epidemiology data suggest that it is endemic to regions of Africa and Asia, where the Aedes mosquito vectors are found.
Trademarks Our trademark portfolio currently contains at least 1,000 trademark registrations, including at least 22 registrations in the United States and the remaining in Canada, the European Union, the United Kingdom, Israel, China, Japan, Australia, and elsewhere.
Trademarks Our trademark portfolio currently contains at least 1,250 trademark registrations, including at least 30 registrations in the United States and the remaining in Canada, the European Union, the United Kingdom, Israel, China, Japan, Australia, and elsewhere.
Severity of disease and likelihood of complications, including postherpetic neuralgia (PHN) also increases with age. People with immunocompromising conditions, people with autoimmune disease using immunosuppressive therapies, people living with HIV and hematopoietic stem cell (HSCT) and organ transplant recipients have an increased risk of developing herpes zoster.
Severity of disease and likelihood of complications, including postherpetic neuralgia (PHN) also increases with age. People with immunocompromising conditions, people using immunosuppressive therapies, people living with HIV, and hematopoietic stem cell (HSCT) and solid organ transplant 16 Table of Contents (SOT) recipients have an increased risk of developing herpes zoster.
In addition, we have at least 600 pending trademark applications in more than 95 jurisdictions, including in the aforementioned locations and additional countries throughout Africa, Asia, and South America.
In addition, we have at least 360 pending trademark applications in more than 55 jurisdictions, including in the aforementioned locations and additional countries throughout Africa, Asia, and South America.
For example, the federal government has passed legislation requiring pharmaceutical manufacturers to provide rebates and discounts to certain entities and governmental payors to participate in federal healthcare programs.
For example, the federal government has passed legislation requiring pharmaceutical 43 Table of Contents manufacturers to provide rebates and discounts to certain entities and governmental payors to participate in federal healthcare programs.
These collaborations include those with: • Carisma Therapeutics , to discover, develop and commercialize in vivo engineered chimeric antigen receptor monocyte (CAR-M) therapeutics for the treatment of cancer, including solid tumors. • CytomX Therapeutics , to create investigational mRNA-based conditionally activated therapies utilizing our mRNA technologies and CytomX ’ s Probody platform. • Generation Bio Co. , to combine our biological and technical expertise with core technologies of Generation Bio's non-viral genetic platform. • Immatics N.V. , to pioneer novel and transformative therapies for cancer patients with high unmet medical need. • Life Edit Therapeutics , to discover and develop in vivo mRNA gene editing therapies. • Metagenomi , focused on discovering and advancing new gene editing systems for in vivo human therapeutic applications.
These collaborations include those with: • Carisma Therapeutics , to discover, develop and commercialize in vivo engineered chimeric antigen receptor monocyte (CAR-M) therapeutics for the treatment of cancer, including solid tumors, and autoimmune diseases. • CytomX Therapeutics , to create investigational mRNA-based conditionally activated therapies utilizing our mRNA technologies and CytomX ’ s Probody platform. • Generation Bio Co. , to combine our biological and technical expertise with core technologies of Generation Bio's non-viral genetic platform. • Immatics N.V. , to pioneer novel and transformative therapies for cancer patients with high unmet medical need. • Life Edit Therapeutics , to discover and develop in vivo mRNA gene editing therapies.
In the United States, it is estimated that over two million children younger than five receive medical attention and up to 80,000 are hospitalized due to RSV infection annually. RSV also causes a substantial burden of respiratory illness in older adults.
Most children are infected at least once by age two. In the United States, it is estimated that over two million children younger than five receive medical attention and up to 80,000 are hospitalized due to RSV infection annually. RSV also causes a substantial burden of respiratory illness in older adults.
We are conducting an ongoing Phase 3 study for mRNA-1647, known as CMVictory, to evaluate the safety and efficacy of mRNA-1647 against primary CMV infection in female participants 16 to 40 years of age.
We are conducting an ongoing pivotal Phase 3 study for mRNA-1647, known as CMVictory, to evaluate the safety and efficacy of mRNA-1647 against primary CMV infection in female participants 16 to 40 years of age. The study is fully enrolled and accruing cases.
Checkpoint cancer vaccine (mRNA-4359) We are developing a checkpoint cancer vaccine (mRNA-4359) that express Indoleamine 2,3 -dioxygenase (IDO) and programmed death-ligand 1 (PD-L1) antigens. We designed mRNA-4359 with the goal of stimulating effector T cells that target and kill suppressive immune and tumor cells that express target antigens.
Checkpoint adaptive immune modulation therapy (mRNA-4359) We are developing a checkpoint adaptive immune modulation therapy (AIM-T) (mRNA-4359) that encodes Indoleamine 2,3 -dioxygenase (IDO) and programmed death-ligand 1 (PD-L1) antigens. We designed mRNA-4359 with the goal of stimulating effector T cells that target and kill suppressive immune and tumor cells that express the target antigens.
We consider the commercial terms of these licenses and their provisions regarding diligence, insurance, indemnification and other similar matters, to be reasonable and customary for our industry. HUMAN CAPITAL We had approximately 5,600 full-time employees in 19 countries around the world as of December 31, 2023.
We consider the commercial terms of these licenses and their provisions regarding diligence, insurance, indemnification and other similar matters, to be reasonable and customary for our industry. HUMAN CAPITAL We had approximately 5,800 full-time employees in 18 countries as of December 31, 2024 .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeEvents that might prevent us from proceeding with clinical trials could include: • regulators, Institutional Review Boards (IRBs) or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on favorable terms with prospective trial sites and prospective contract research organizations (CROs); • changes to the scale or site of our manufacturing could cause significant delays or changes in our clinical trial designs; • the outcome of our preclinical studies and our early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results; • we may be unable to establish or achieve clinically meaningful endpoints for our studies; • if we make changes to our product candidates after clinical trials have commenced (which we have done in the past), we may be required to repeat earlier stages or delay later stages of clinical testing; • clinical trials of any product candidates may fail to show safety or efficacy, or may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional nonclinical studies or clinical trials, or we may decide to abandon product development programs; 49 • our product candidates, or other medicines in the same class as ours, may have undesirable side effects, such as the immunogenicity of the LNPs or their components, the immunogenicity of the protein made by the mRNA or degradation products, any of which could lead to serious adverse events, or other effects; • administration of our LNPs could lead to systemic side effects related to the components of the LNPs and could contribute to immune reactions, infusion reactions, complement reactions, opsonization reactions, antibody reactions or reactions to PEG-lipids; • significant adverse events or other side effects could be observed in our clinical trials; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the applicable clinical trial protocol or withdraw from the applicable clinical trial, which may require that we add new clinical trial sites; • regulators may impose a complete or partial clinical hold on a clinical trial, or we or our investigators, IRBs or ethics committees may suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that participants are being exposed to an unacceptable benefit-risk ratio; • regulators may impose a complete or partial clinical hold on clinical trials of other companies working on mRNA medicines; • the cost of preclinical or nonclinical testing and studies and clinical trials of product candidates may be greater than anticipated; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate; • safety and efficacy concerns regarding our product candidates will be considered by us and by the FDA and other regulators as we pursue clinical trials of new product candidates, develop effective informed consent documentation and work with IRBs and scientific review committees (SRCs); • safety or efficacy concerns could arise from nonclinical or clinical testing of other therapies targeting a similar disease state or other therapies, such as gene therapy, that are perceived as similar to ours; • adverse side effects could be observed in future clinical trials where our product candidates are administered in combination with other therapies (such as the co-administration of our INT product candidate, mRNA-4157 ); and • a lack of adequate funding to continue a particular clinical trial.
Biggest changeEvents that might prevent us from proceeding with clinical trials could include: • regulators, Institutional Review Boards (IRBs) or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on favorable terms with prospective trial sites and prospective contract research organizations (CROs); • changes to the scale or site of our manufacturing could cause significant delays or changes in our clinical trial designs; • the outcome of our preclinical studies and our early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results; • we may be unable to establish or achieve clinically meaningful endpoints for our studies; • if we make changes to our product candidates after clinical trials have commenced (which we have done in the past), we may be required to repeat earlier stages or delay later stages of clinical testing; • clinical trials of any product candidates may fail to show safety or efficacy, or may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional nonclinical studies or clinical trials, or we may decide to abandon product development programs; 48 • our product candidates, or other medicines in the same class as ours, may cause significant adverse events or other undesirable side effects, such as the immunogenicity of the LNPs or their components, the immunogenicity of the protein made by the mRNA or degradation products, any of which could lead to serious adverse events, or other effects; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the applicable clinical trial protocol or withdraw from the applicable clinical trial, which may require that we add new clinical trial sites; • regulators may impose a complete or partial clinical hold on a clinical trial (or a trial of another company working on mRNA medicines), or we or our investigators, IRBs or ethics committees may suspend or terminate clinical research or trials for various reasons, including quality events, noncompliance with regulatory requirements or a finding that participants are being exposed to an unacceptable benefit-risk ratio; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials may be insufficient or inadequate; • safety and efficacy concerns regarding our product candidates will be considered by us and by the FDA and other regulators as we pursue clinical trials of new product candidates, develop effective informed consent documentation and work with IRBs and scientific review committees (SRCs); • safety or efficacy concerns could arise from nonclinical or clinical testing of other therapies targeting a similar disease state or other therapies, such as gene therapy, that are perceived as similar to ours; • adverse side effects could be observed in future clinical trials where our product candidates are administered in combination with other therapies (such as the co-administration of our INT product candidate, mRNA-4157 ); • delays in developing assays acceptable to the FDA or other regulators; and • a lack of adequate funding to continue a particular clinical trial, including due to higher-than-anticipated costs.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may not be made available on commercially favorable terms, if at all, or may require substantial time and expense.
In the event of a successful infringement claim against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may not be made available on commercially favorable terms, if at all, or may require substantial time and expense.
Our business may be adversely affected by many factors associated with our expanding global business, including: • efforts to develop an international commercial sales, marketing and supply chain and distribution organization, including efforts to mitigate longer accounts receivable collection times, longer lead times for shipping and potential language barriers; • our customers’ ability to obtain reimbursement for our products in foreign markets; • our inability to directly control commercial activities because we rely on third parties; • different medical practices and customs in foreign countries affecting acceptance in the marketplace; • changes in a specific country’s or region’s political and cultural climate or economic condition; • an increased legal and compliance burden to establish, maintain and operate legal entities in foreign countries; • the burden of complying with complex and changing foreign regulatory, tax, accounting, reporting and legal requirements, including the European General Data Protection Regulation 2016/679 (GDPR); • the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute, and the difficulty of effective enforcement of contractual provisions in local jurisdictions; • inadequate IP protection in foreign countries and the existence of potentially relevant third-party IP rights; • trade-protection measures including trade restrictions, import or export licensing requirements such as Export Administration Regulations promulgated by the U.S.
Our business may be adversely affected by many factors associated with our expanding global business, including: • efforts to develop an international commercial sales, marketing and supply chain and distribution organization, including efforts to mitigate longer accounts receivable collection times, longer lead times for shipping and potential language barriers; • our customers’ ability to obtain reimbursement for our products in foreign markets; • our inability to directly control commercial activities because we rely on third parties; • different medical practices and customs in foreign countries affecting acceptance in the marketplace; • changes in a specific country’s or region’s political and cultural climate or economic condition; • an increased legal and compliance burden to establish, maintain and operate legal entities in foreign countries; • the burden of complying with complex and changing foreign regulatory, tax, accounting, reporting and legal requirements, including the European General Data Protection Regulation 2016/679 (GDPR); 65 • the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute, and the difficulty of effective enforcement of contractual provisions in local jurisdictions; • inadequate IP protection in foreign countries and the existence of potentially relevant third-party IP rights; • trade-protection measures including trade restrictions, import or export licensing requirements such as Export Administration Regulations promulgated by the U.S.
Our product candidates that appear promising in the early phases of development may fail to advance, experience delays in the clinic, experience clinical holds or fail to reach the market for many reasons, including: • nonclinical or preclinical study, or clinical trial, results may show potential mRNA medicines to be less effective than desired or to have harmful or problematic side effects or toxicities; • adverse results in our clinical trials, or in those of others developing similar products, or adverse effects relating to mRNA, or our LNPs, may lead to negative publicity or delays in or termination of our programs; • the efficacy or safety of a combination vaccine product candidate could be less than that seen with the administration of the vaccine s separately, which could prevent the combination product from obtaining regulatory approval; • adverse events related to products that are perceived to be similar to mRNA medicines, such as those related to gene therapy or gene editing, could result in a decrease in the perceived benefit of one or more of our programs, increased regulatory scrutiny, decreased confidence by patients and clinical trial collaborators in our product candidates and less demand for any product that we may develop; • the insufficient ability of our translational models to reduce risk or predict outcomes in humans, particularly given that each component of our product candidates may have a dependent or independent effect on safety, tolerability and efficacy, which may be species-dependent; • manufacturing failures or insufficient supply of cGMP materials for clinical trials, or higher than expected cost could delay or set back clinical trials, or make mRNA medicines commercially unattractive; • changes that we make to optimize our manufacturing, testing or formulating of cGMP materials could impact the safety, tolerability and efficacy profile of our product candidates; • pricing or reimbursement issues or other factors that delay clinical trials or make any mRNA medicine uneconomical or noncompetitive with other therapies; • our large pipeline of product candidates could result in a greater quantity of reportable adverse events, including suspected unexpected serious adverse reactions, other reportable negative clinical outcomes, manufacturing reportable events or material clinical events that could lead to clinical delay or hold by the FDA or applicable regulatory authority or other clinical delays, any of which could negatively impact the perception of one or more of our programs, as well as our business as a whole; • failure to timely advance our programs or a failure or delay in receiving necessary regulatory approvals due to, among other factors, slow or failure to complete enrollment in clinical trials, withdrawal by trial participants from trials, failure to achieve trial endpoints, additional time requirements for data analysis, data integrity issues, preparation of a BLA, or the equivalent application, discussions with the FDA or EMA, a regulatory request for additional nonclinical or clinical data or safety formulation or manufacturing issues may lead to our inability to obtain sufficient funding; • new legislation or regulations passed by U.S., state or foreign governments in response to negative public perception of mRNA medicines; and 52 • the proprietary rights of others and their competing products and technologies that may prevent our mRNA medicines from being commercialized.
Our product candidates that appear promising in the early phases of development may fail to advance, experience delays in the clinic, experience clinical holds or fail to reach the market for many reasons, including: • nonclinical or preclinical study, or clinical trial, results may show potential mRNA medicines to be less effective than desired or to have harmful or problematic side effects or toxicities; • adverse results in our clinical trials, or in those of others developing similar products, or adverse effects relating to mRNA, or our LNPs, may lead to negative publicity or delays in or termination of our programs; • the efficacy or safety of a combination vaccine product candidate could be less than that seen with the administration of the vaccine s separately, which could prevent the combination product from obtaining regulatory approval; • adverse events related to products that are perceived to be similar to mRNA medicines, such as those related to gene therapy or gene editing, could result in a decrease in the perceived benefit of one or more of our programs, increased regulatory scrutiny, decreased confidence by patients and clinical trial collaborators in our product candidates and less demand for any product that we may develop; • the insufficient ability of our translational models to reduce risk or predict outcomes in humans, particularly given that each component of our product candidates may have a dependent or independent effect on safety, tolerability and efficacy, which may be species-dependent; • manufacturing failures or insufficient supply of current Good Manufacturing Practice (cGMP) materials for clinical trials, or higher than expected cost could delay or set back clinical trials, or make mRNA medicines commercially unattractive; • changes that we make to optimize our manufacturing, testing or formulating of cGMP materials could impact the safety, tolerability and efficacy profile of our product candidates; • pricing or reimbursement issues or other factors that delay clinical trials or make any mRNA medicine uneconomical or noncompetitive with other therapies; • our large pipeline of product candidates could result in a greater quantity of reportable adverse events, including suspected unexpected serious adverse reactions, other reportable negative clinical outcomes, manufacturing reportable events or material clinical events that could lead to clinical delay or hold by the FDA or applicable regulatory authority or other clinical delays, any of which could negatively impact the perception of one or more of our programs, as well as our business as a whole; • failure to timely advance our programs or a failure or delay in receiving necessary regulatory approvals due to, among other factors, slow or failure to complete enrollment in clinical trials, withdrawal by trial participants from trials, failure to achieve trial endpoints, additional time requirements for data analysis, data integrity issues, preparation of a BLA or the equivalent application, discussions with the FDA or EMA, a regulatory request for additional nonclinical or clinical data or safety formulation or manufacturing issues may lead to our inability to obtain sufficient funding; • new legislation or regulations passed by U.S., state or foreign governments in response to negative public perception of mRNA medicines; and • the proprietary rights of others and their competing products and technologies that may prevent our mRNA medicines from being commercialized.
If any such cyber-attack or physical intrusion against us or those with whom we share confidential, protected or sensitive data or information, or upon which our business 69 relies, were to result in a loss of or damage to our data, systems or infrastructure, or interrupt our operations, such as a material disruption of our development programs or our manufacturing operations, or due to a loss of any of our proprietary or confidential information, it would have a material adverse effect on us.
If any such cyber-attack or physical intrusion against us or those with whom we share confidential, protected or sensitive data or information, or upon which our business relies, were to result in a loss of or damage to our data, systems or infrastructure, or interrupt our operations, such as a material disruption of our development programs or our manufacturing operations, or due to a loss of any of our proprietary or confidential information, it would have a material adverse effect on us.
Uncertainties resulting from the initiation and continuation of any litigation could delay our research, development and commercialization efforts and limit our ability to continue our operations. 63 If third-party owners of any patent rights that we license do not properly or successfully obtain, maintain or enforce the patents underlying such licenses, our competitive position and business prospects may be harmed.
Uncertainties resulting from the initiation and continuation of any litigation could delay our research, development and commercialization efforts and limit our ability to continue our operations. If third-party owners of any patent rights that we license do not properly or successfully obtain, maintain or enforce the patents underlying such licenses, our competitive position and business prospects may be harmed.
Even if we observe positive safety, tolerability and levels of immunogenicity in early clinical trials, we may not observe acceptable safety or efficacy profiles in later-stage trials required for approval of these programs. There are many clinical and manufacturing challenges specific to our INT product candidates and any other neoantigen cancer vaccines we may develop.
Even if we observe positive safety, tolerability and levels of immunogenicity in early clinical trials, we may not observe acceptable safety or efficacy profiles in later-stage trials required for approval of these programs. 49 There are many clinical and manufacturing challenges specific to our INT product candidates and any other neoantigen cancer vaccines we may develop.
Even if we are successful in defending against such claims, litigation could result in substantial costs and distract management and other employees, and could impact or patenting strategy. Changes in U.S. patent and regulatory law could impair our ability to protect our products. Our success is heavily dependent on IP, particularly patents.
Even if we are successful in defending against such claims, litigation could result in substantial costs and distract management and other employees, and could impact or patenting strategy. 62 Changes in U.S. patent and regulatory law could impair our ability to protect our products. Our success is heavily dependent on IP, particularly patents.
Establishing additional or replacement suppliers for any of the components or processes used in our products or product candidates, if required, may not be accomplished quickly, if at all. Any replacement supplier (or us, if we produced directly) would need to be qualified and may require additional regulatory authority approval, resulting in further delay.
Establishing additional or replacement suppliers for any of the components or processes used in our products or product candidates, if required, may not be accomplished quickly, if at all. Any replacement supplier (or us, if we produced directly) would need to be qualified and may require additional regulatory approval, resulting in further delay.
Additionally, we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a strategic alliance. If we are not successful in discovering, developing and commercializing additional products, our ability to expand our business and achieve our strategic objectives would be impaired.
Additionally, we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a strategic alliance. 67 If we are not successful in discovering, developing and commercializing additional products, our ability to expand our business and achieve our strategic objectives would be impaired.
In response, we have adapted the tracking and reporting of our corporate responsibility program to various evolving ESG frameworks, and we have established and announced goals and other objectives related to ESG matters. Statements about these goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.
In response, we have adapted the tracking and reporting of our corporate responsibility program to various evolving ESG frameworks, and we have established and 72 announced goals and other objectives related to ESG matters. Statements about these goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.
In addition, the FDA and other regulators may interpret data from our clinical trials differently than we do and such agencies may require us to conduct additional studies or analyses, which could delay or prevent us from obtaining full regulatory approvals in certain jurisdictions or for certain demographics.
In addition, the FDA and other regulators may interpret data from our 50 clinical trials differently than we do and such agencies may require us to conduct additional studies or analyses, which could delay or prevent us from obtaining full regulatory approvals in certain jurisdictions or for certain demographics.
In recent years, such changes have been made and changes are likely to occur in the future, which could have a material adverse effect on our business, cash flow, financial condition and results of operations. The increasing use of social media platforms presents risks and challenges.
In recent years, such changes have been made and changes are likely to occur in the future, which could have a material adverse effect on our business, cash flow, financial condition and results of operations. 76 The increasing use of social media platforms presents risks and challenges.
The Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Exchange Act. Our by-laws further provide that the U.S. District Court for the District of Massachusetts is the exclusive forum for resolving any complaint asserting a cause of action arising 77 under the Securities Act (the Federal Forum Provision).
The Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Exchange Act. Our by-laws further provide that the U.S. District Court for the District of Massachusetts is the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the Federal Forum Provision).
Inadequate reimbursement for such services may discourage physicians from prescribing or recommending our products, adversely affecting our ability to market or sell those products. 48 The market opportunities for our products and product candidates may be smaller than we believe, or we may be unable to successfully identify clinical trial participants.
Inadequate reimbursement for such services may discourage physicians from prescribing or recommending our products, adversely affecting our ability to market or sell those products. The market opportunities for our products and product candidates may be smaller than we believe, or we may be unable to successfully identify clinical trial participants.
For example, the holder of an approved BLA must monitor and report adverse events and monitor and report any failure of a product to meet the specifications in the BLA, as well as submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling, or manufacturing process.
For example, the holder of an approved BLA must monitor and report adverse events and monitor and report any failure of a product to meet the specifications in the BLA, as well as submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product 52 labeling, or manufacturing process.
Contracts and grants funded by the U.S. government and its agencies, including our agreements funded by BARDA and DARPA and our collaboration with NIAID, include provisions that reflect the government’s substantial rights and remedies, many of which are not typically found in commercial contracts, including powers of the government to: • terminate agreements, in whole or in part, for any reason or no reason; • reduce or modify the government’s obligations under such agreements without the consent of the other party; • claim rights, including IP rights, in products and data developed under such agreements; • audit contract-related costs and fees, including allocated indirect costs; • suspend the contractor or grantee from receiving new contracts pending resolution of alleged violations of procurement laws or regulations; • impose U.S. manufacturing requirements for products that embody inventions conceived or first reduced to practice under such agreements; • suspend or debar the contractor or grantee from doing future business with the government; 65 • control and potentially prohibit the export of products; • pursue criminal or civil remedies under the False Claims Act, False Statements Act and similar remedy provisions specific to government agreements; and • limit the government’s financial liability to amounts appropriated by the U.S.
Contracts and grants funded by the U.S. government and its agencies, including our agreements funded by BARDA and DARPA and our collaboration with NIAID, include provisions that reflect the government’s substantial rights and remedies, many of which are not typically found in commercial contracts, including powers of the government to: • terminate agreements, in whole or in part, for any or no reason; • reduce or modify the government’s obligations under such agreements without our consent; • claim rights, including IP rights, in products and data developed under such agreements; • audit contract-related costs and fees, including allocated indirect costs; • suspend the contractor or grantee from receiving new contracts pending resolution of alleged violations of procurement laws or regulations; • impose U.S. manufacturing requirements for products that embody inventions conceived or first reduced to practice under such agreements; • suspend or debar the contractor or grantee from doing future business with the government; • control and potentially prohibit the export of products; • pursue criminal or civil remedies under the False Claims Act, False Statements Act and similar remedy provisions specific to government agreements; and • limit the government’s financial liability to amounts appropriated by the U.S.
If we, our contract manufacturers or other strategic collaborators fail to comply with applicable post-approval regulatory requirements, a regulatory agency may issue a warning letter asserting that we are in violation of the law, seek an injunction or impose civil or criminal penalties or monetary fines, suspend or withdraw regulatory approval or revoke a license, suspend any ongoing clinical trials, refuse to approve a pending BLA or supplements to a BLA submitted by us, seize or recall products or product candidates, or require field alerts to physicians, pharmacists and hospitals or refuse to allow us to enter into supply contracts.
If we, our contract manufacturers or other strategic collaborators fail to comply with applicable post-approval regulatory requirements, a regulator may issue a warning letter asserting that we are in violation of the law, seek an injunction or impose civil or criminal penalties or monetary fines, suspend or withdraw regulatory approval or revoke a license, suspend any ongoing clinical trials, refuse to approve a pending BLA or supplements to a BLA submitted by us, seize or recall products or product candidates, or require field alerts to physicians, pharmacists and hospitals or refuse to allow us to enter into supply contracts.
If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable IP 64 rights, including exclusive ownership of, or right to use, valuable IP. Such an outcome could have a material adverse impact on our business.
If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable IP rights, including exclusive ownership of, or right to use, valuable IP. Such an outcome could have a material adverse impact on our business.
Additionally, many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. For example, during the COVID-19 pandemic, certain countries threatened steps to facilitate compulsory licenses to permit the distribution of a COVID-19 vaccine in those countries.
Additionally, many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. For example, during the COVID pandemic, certain countries threatened steps to facilitate compulsory licenses to permit the distribution of a COVID vaccine in those countries.
Arrangements with third-party payors and customers can expose pharmaceutical manufacturers to broadly applicable fraud and abuse and other healthcare laws and regulations, which may constrain the business or financial arrangements and relationships through which such companies sell, market and distribute pharmaceutical products.
Arrangements with third-party payors and customers can expose pharmaceutical 69 manufacturers to broadly applicable fraud and abuse and other healthcare laws and regulations, which may constrain the business or financial arrangements and relationships through which such companies sell, market and distribute pharmaceutical products.
If we are unable to institute 56 necessary controls related to product development, manufacturing and quality, we may encounter difficulties producing our products on the timelines and in the quantities set forth in our supply agreements or to meet potential future demand.
If we are unable to institute necessary controls related to product development, manufacturing and quality, we may encounter difficulties producing our products on the timelines and in the quantities set forth in our supply agreements or to meet potential future demand.
Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents or 61 pending patent applications or that we were the first to file for patent protection of such inventions. We therefore may be unable to secure desired patent rights, thereby losing exclusivity.
Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents or pending patent applications or that we were the first to file for patent protection of such inventions. We therefore may be unable to secure desired patent rights, thereby losing exclusivity.
For example, in March 2022, we announced that we will not enforce our patents for COVID-19 vaccines against companies manufacturing in or for the Gavi COVAX Advance Market Commitment countries, provided that the manufactured vaccines are solely for use in the AMC 92 countries.
For example, in March 2022, we announced that we will not enforce our patents for COVID vaccines against companies manufacturing in or for the Gavi COVAX Advance Market Commitment (AMC) countries, provided that the manufactured vaccines are solely for use in the AMC 92 countries.
Oppositions and inter partes review petitions have been filed against some of our patents, and we expect that further proceedings will be filed in the European Patent Office (EPO), USPTO and elsewhere relating to patents and patent applications in our portfolio.
Oppositions and inter partes review petitions have been filed against some of 60 our patents, and we expect that further proceedings will be filed in the European Patent Office (EPO), USPTO and elsewhere relating to patents and patent applications in our portfolio.
The FDA and comparable foreign regulators have substantial discretion in the approval process and may refuse to accept any marketing approval application or may decide that our data are insufficient for marketing approval and require additional preclinical, clinical or other studies.
The FDA and foreign regulators have substantial discretion in the approval process and may refuse to accept any marketing approval application or may decide that our data are insufficient for marketing approval and require additional preclinical, clinical or other studies.
Pursuant to by-laws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for state law claims for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of or based on a breach of a fiduciary duty owed by any of our current or former directors, officers, or other employees to us or our stockholders, (3) any action asserting a claim against us or any of our current or former directors, officers, employees or stockholders arising pursuant to any provision of the Delaware General Corporation Law or our by-laws or (4) any action asserting a claim governed by the internal affairs doctrine (the Delaware Forum Provision).
Pursuant to by-laws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for state law claims for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of or based on a breach of a fiduciary duty owed by any of our current or former directors, officers, or other employees to us or our shareholders, (3) any action asserting a claim against us or any of our current or former directors, officers, employees or shareholders arising pursuant to any provision of the Delaware General Corporation Law or our by-laws or (4) any action asserting a claim governed by the internal affairs doctrine (the Delaware Forum Provision).
Our investigational therapies for local injections often require specialized skills for conducting a clinical trial that could delay clinical trials or slow or impair commercialization of a product due to the poor adoption of injected local therapeutics or intratumoral therapies.
Our investigational therapies for local injections often require specialized skills for conducting a clinical trial that could delay clinical trials or slow or impair commercialization of a product due to the poor adoption of injected local therapeutics.
As a result, the design and conduct of clinical trials of product candidates for the treatment of these disorders and other disorders may take longer, be more costly or be less effective due to the novelty of development in these diseases.
As a result, the design and conduct of clinical trials of product candidates for the treatment of these disorders may take longer, be more costly or be less effective due to the novelty of development in these diseases.
In addition, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, if at all.
In addition, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 59 months after filing, if at all.
The development and use of GenAI and other AI technologies (collectively, AI Technologies), along with an uncertain regulatory landscape, pose risks that could harm our reputation, expose us to liability or adversely affect our business.
The development and use of GenAI and other AI technologies (collectively, AI Technologies), along with an uncertain regulatory landscape, pose risks that could harm our reputation, expose us to liability or otherwise adversely affect our business.
Manufacturing unique lots of INTs is susceptible to product loss or failure due to issues with: • logistics associated with the collection of a patient’s tumor, blood or other tissue sample; • shipping such samples to a facility for genetic sequencing; • next-generation sequencing of the tumor mRNA; • identification of appropriate tumor-specific mutations; • the use of a software program, including proprietary and open source components, which is hosted in the cloud and a part of our product candidate, to assist with the design of the patient-specific mRNA, which software must be maintained and secured; • effective design of the patient-specific mRNA that encodes for the required neoantigens; • batch specific manufacturing failures or issues that arise due to the uniqueness of each patient-specific batch; • quality control testing failures; • unexpected failures of batches placed on stability; • shortages or quality control issues with single-use assemblies, consumables or critical parts sourced from third-party vendors that must be changed out for each patient-specific batch; • significant costs associated with individualized manufacturing that may adversely affect our ability to continue development; • successful and timely manufacture and release of the patient-specific batch; • shipment issues encountered during transport of the batch to the patient site of care; and • the ability to define a consistent safety profile at a given dose when each participant receives a unique therapy.
Manufacturing unique lots of INTs is susceptible to product loss or failure due to issues with: • logistics associated with the collection and shipping of a patient’s tumor, blood or other tissue sample; • next-generation sequencing of the tumor mRNA and identification of appropriate tumor-specific mutations; • the use of a software program, including proprietary and open source components, which is hosted in the cloud and a part of our product candidate, to assist with the design of the patient-specific mRNA, which software must be maintained and secured; • effective design of the patient-specific mRNA that encodes for the required neoantigens; • batch specific manufacturing failures or issues that arise due to the uniqueness of each patient-specific batch; • quality control testing failures; • unexpected failures of batches placed on stability; • shortages or quality control issues with single-use assemblies, consumables or critical parts sourced from third-party vendors that must be changed out for each patient-specific batch; • significant costs associated with individualized manufacturing that may adversely affect our ability to continue development; • successful and timely manufacture and release of the patient-specific batch; • shipment issues encountered during transport of the batch to the patient site of care; and • the ability to define a consistent safety profile at a given dose when each participant receives a unique therapy.
Additionally, even if we maintain insurance coverage for a type of liability, a particular claim may not be covered if it is subject to a coverage exclusion or we do not otherwise meet the conditions for coverage.
Additionally, even if we maintain insurance coverage for a type of liability, a particular claim may not be covered if it is subject to a 68 coverage exclusion or we do not otherwise meet the conditions for coverage.
Ensuring business arrangements comply with applicable 72 healthcare laws, as well as responding to possible investigations by government authorities, is time- and resource-consuming and can divert a company’s attention from the business.
Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, is time- and resource-consuming and can divert a company’s attention from the business.
This has in the past and may in the future result in our having to resupply 55 batches for preclinical or clinical activities when there is insufficient product stability during storage and insufficient supply.
This has in the past and may in the future result in our having to resupply batches for preclinical or clinical activities when there is insufficient product stability during storage and insufficient supply.
Our amended and restated certificate of incorporation (charter), amended and restated by-laws (by-laws) and Delaware law contain provisions that could delay or prevent a hostile takeover or change in control of us or changes in our management.
Our restated certificate of incorporation (charter), second amended and restated by-laws (by-laws) and Delaware law contain provisions that could delay or prevent a hostile takeover or change in control of us or changes in our management.
For example, some studies have suggested that our COVID-19 vaccine may be associated with higher rates of myocarditis and pericarditis in young males compared to other COVID-19 vaccines.
For example, some studies have suggested that our COVID vaccine may be associated with higher rates of myocarditis and pericarditis in young males compared to other COVID vaccines.
Further, even if we achieve the pre-specified criteria, our clinical trials may produce unpredictable or inconsistent results compared against the more traditional efficacy endpoints in the trial.
Further, even if we achieve the pre- 51 specified criteria, our clinical trials may produce unpredictable or inconsistent results compared against the more traditional efficacy endpoints in the trial.
In addition, to the extent that we rely on foreign contract manufacturers, we are subject to additional risks, including the need to comply with import and export regulations.
In addition, to the extent that 56 we rely on foreign contract manufacturers, we are subject to additional risks, including the need to comply with import and export regulations.
We are frequently asked by investors and other stakeholders to set ambitious ESG goals and provide new and more robust disclosure on goals, progress toward goals and other matters of interest to ESG stakeholders.
We are frequently asked by investors and other stakeholders to set ESG goals and provide new and more robust disclosure on goals, progress toward goals and other matters of interest to ESG stakeholders.
Our use of single-source suppliers exposes us to several risks, including disruptions in supply, price increases, late deliveries or business interruptions. There are, in general, few alternative sources of supply for substitute components. If we have to switch suppliers, the manufacture and delivery of our products or product candidates could be interrupted for an extended period.
Our use of single-source suppliers exposes us to several risks, including disruptions in supply, price increases, late deliveries or business interruptions. There are, in general, few alternative sources of supply for substitute components. If we must switch suppliers, the manufacture and delivery of our products or product candidates could be interrupted for an extended period.
The occurrence of any event or penalty described above may inhibit our ability to commercialize our COVID-19 vaccine , or any future approved products, and generate revenues.
The occurrence of any event or penalty described above may inhibit our ability to commercialize our COVID vaccine , or any future approved products, and generate revenues.
Additionally, pricing and reimbursement for any product we develop may be adversely affected by a number of factors, including: • changes in, and implementation of, federal, state or foreign government regulations or private third-party payors’ reimbursement policies; • pressure by employers on private health insurance plans to reduce costs; and • consolidation and increasing assertiveness of payors seeking price discounts or rebates in connection with the placement of our products on their formularies and, in some cases, the imposition of restrictions on access or coverage of particular drugs or pricing determined based on perceived value.
Additionally, pricing and reimbursement for any product we develop may be adversely affected by various factors, including: • changes in, and implementation of, federal, state or foreign government regulations or private third-party payors’ reimbursement policies; • pressure by employers on private health insurance plans to reduce costs; and • consolidation and increasing assertiveness of payors seeking price discounts or rebates in connection with the placement of our products on their formularies and, in some cases, the imposition of restrictions on access or coverage of particular drugs or pricing determined based on perceived value.
In addition, the uncertain translatability of target selection from preclinical animal models, including mouse and non-human primate models, to successful clinical trial results may be impossible, particularly for immuno-oncology and systemic therapies, and cancer vaccines. In general, several biological steps are required for delivery of mRNA to translate into therapeutically active medicines.
In addition, the uncertain translatability of target selection from preclinical animal models, including mouse and non-human primate models, to successful clinical trial results may be impossible, particularly for systemic therapies and cancer vaccines. In general, several biological steps are required for delivery of mRNA to translate into therapeutically active medicines.
That may require resupplying clinical material or making additional cGMP batches to keep up with clinical trial demand before such pharmaceutical property testing is completed. We are utilizing a number of raw materials and excipients that have a single source of supply, are new to the pharmaceutical industry and are being employed in a novel manner.
That may require resupplying clinical material or making additional cGMP batches to keep up with clinical trial demand before such pharmaceutical property testing is completed. We utilize a number of raw materials and excipients that have a single source of supply, are new to the pharmaceutical industry and are being employed in a novel manner.
The association of our medicines with gene therapies could result in increased regulatory burdens, impair the reputation of our investigational medicines or negatively impact our platform or our business. There are only a few approved gene therapy products in the United States or foreign jurisdictions, and there have been well-reported significant adverse events associated with their testing and use.
The association of our products with gene therapies could result in increased regulatory burdens, impair the reputation of our products or negatively impact our platform or our business. There are only a few approved gene therapy products in the United States or foreign jurisdictions, and there have been well-reported significant adverse events associated with their testing and use.
If clinical trials are not conducted in accordance with our contractual expectations or regulatory requirements, action by regulatory authorities may significantly and adversely affect the conduct or progress of such trials or even require a clinical trial to be redone. Accordingly, our efforts to obtain regulatory approvals for and commercialize our drug candidates could be delayed.
If clinical trials are not conducted in accordance with our contractual expectations or regulatory requirements, action by regulators may significantly and adversely affect the conduct or progress of such trials or even require a clinical trial to be redone. Accordingly, our efforts to obtain regulatory approvals for and commercialize our drug candidates could be delayed.
We also rely on non-disclosure agreements and invention assignment agreements entered into with our employees, consultants and third parties. If any trade secret, know-how or other technology not protected by a patent were to be disclosed to or independently developed by a competitor, our business and financial condition could be materially adversely affected.
We also rely on non-disclosure agreements and invention assignment agreements with our employees, consultants and third parties. If any trade secret, know-how or other technology not protected by a patent were to be disclosed to or independently developed by a competitor, our business and financial condition could be materially adversely affected.
Additionally, any portfolio-spanning risks, whether known or unknown, such as an increased risk of a particular type of side effect, if realized in any one of our programs, would have a material and adverse effect on our other programs and on our business as a whole. There are also specific additional risks to certain of our modalities and programs.
Additionally, any portfolio-spanning risks, whether known or unknown, such as an increased risk of a particular type of side effect, if realized in any one of our programs, would have a material and adverse effect on our other programs and on our overall business. There are also specific additional risks to certain of our modalities and programs.
A key element of our strategy is to discover, develop and commercialize products beyond our current portfolio to treat various conditions and in a variety of therapeutic areas. We intend to do so by investing in our drug discovery efforts, exploring potential strategic alliances for the development of new products and in-licensing technologies.
A key element of our longer-term strategy is to discover, develop and commercialize products beyond our current portfolio to treat various conditions and in a variety of therapeutic areas. We intend to do so by investing in our drug discovery efforts, exploring potential strategic alliances for the development of new products and in-licensing technologies.
In addition, failure of any third-party contractor to conduct activities in accordance with our expectations could adversely affect the relevant research, development, commercial or administrative activity. Failure of any third-party contractor to timely provide access to our data in a format that is acceptable to us may result in delays or impediments to our regulatory submissions or other development activities.
In addition, failure of any third-party contractor to conduct activities in accordance with our expectations could adversely affect the relevant research, development, commercial or administrative activity. Failure of any third-party contractor to timely provide access to our data in a format acceptable to us may result in delays or impediments to our regulatory submissions or other development activities.
The FDA, the EMA and other foreign regulatory authorities may require us to submit product samples of any lot of any approved product, together with the protocols showing the results of applicable tests, at any time. In some cases, regulators may prohibit us from distributing a lot or lots until it authorizes release.
The FDA, the EMA and other foreign regulators may require us to submit product samples of any lot of any approved product, together with the protocols showing the results of applicable tests, at any time. In some cases, regulators may prohibit us from distributing a lot or lots until it authorizes release.
Our internal computer systems and infrastructure and those of our strategic collaborators, vendors, contractors, consultants or regulatory authorities with whom we share confidential, protected or sensitive data or information, or upon which our business relies, are vulnerable to damage from computer viruses, unauthorized access, misuse, natural disasters, terrorism, cybersecurity threats, war and telecommunication and electrical failures, as well as security compromises or breaches, which may compromise our systems, infrastructure, data or that of those with whom we share such data or information or upon which our business relies, or lead to data compromise, misuse, misappropriation or leakage.
Our internal computer systems and infrastructure and those of our strategic collaborators, vendors, contractors, consultants or regulators with whom we share confidential, protected or sensitive data or information, or upon which our business relies, are vulnerable to damage from computer viruses, unauthorized access, misuse, natural disasters, terrorism, cybersecurity threats, war and telecommunication and electrical failures, as well as security compromises or breaches, which may compromise our systems, infrastructure, data or that of those with whom we share such data or information or upon which our business relies, or lead to data compromise, misuse, misappropriation or leakage.
The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is unenforceable or invalid, and if the Federal Forum Provision is found to be unenforceable, we may incur additional costs in resolving such matters. The Court of Chancery of the State of Delaware and the U.S.
The Federal Forum Provision may also impose additional litigation costs on shareholders who assert that the provision is unenforceable or invalid, and if the Federal Forum Provision is found to be unenforceable, we may incur additional costs in resolving such matters. The Court of Chancery of the State of Delaware and the U.S.
The use of service providers and suppliers could expose us to risks, including: • termination or non-renewal of supply and service agreements in a manner or at a time that is costly or damaging to us; • disruptions to the operations of these suppliers and service providers caused by conditions unrelated to our business or operations, including the bankruptcy of the supplier or service provider; and • inspections of third-party facilities by regulatory authorities that could have a negative outcome and result in delays to or termination of their ability to supply our requirements.
The use of service providers and suppliers could expose us to risks, including: • termination or non-renewal of supply and service agreements in a manner or at a time that is costly or damaging to us; • disruptions to the operations of these suppliers and service providers caused by conditions unrelated to our business or operations, including the bankruptcy of the supplier or service provider; and • inspections of third-party facilities by regulators that could have a negative outcome and result in delays to or termination of their ability to supply our requirements.
Insufficient stability or shelf life of our product candidates could materially delay our or our strategic collaborators’ ability to continue clinical trials or require us to begin a new clinical trial with a newly formulated drug product, due to the need to manufacture additional preclinical or clinical supply.
Insufficient stability or shelf life of our product candidates could materially delay our ability to continue clinical trials or require us to begin a new clinical trial with a newly formulated drug product, due to the need to manufacture additional preclinical or clinical supply.
Provisions in our organizational documents, as well as provisions of Delaware law, could make it more difficult or costly for a third party to acquire us or remove our current management, even if doing so would benefit our stockholders.
Provisions in our organizational documents, as well as provisions of Delaware law, could make it more difficult or costly for a third party to acquire us or remove our current management, even if doing so would benefit our shareholders.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of shareholders owning in excess of 15% of our outstanding voting stock to merge or combine with us.
Even if regulatory approval is obtained for any of our mRNA medicines, there is no assurance that either we or our CMOs will be able to manufacture the approved medicine to specifications acceptable to the FDA or other regulatory authorities.
Even if regulatory approval is obtained for any of our mRNA medicines, there is no assurance that either we or our CMOs will be able to manufacture the approved medicine to specifications acceptable to the FDA or other regulators.
Deviations in the manufacturing process, including those affecting quality attributes and stability, may cause unacceptable changes in the product, resulting in lot failures or product recalls. Our third-party contract 58 manufacturers have experienced lot failures resulting in product recalls of our COVID-19 vaccine.
Deviations in the manufacturing process, including those affecting quality attributes and stability, may cause unacceptable changes in the product, resulting in lot failures or product recalls. Our third-party contract manufacturers have experienced lot failures resulting in product recalls of our COVID vaccine.
If the U.S. government exercises such march-in rights, we may receive compensation that is deemed reasonable by the U.S. government in its sole discretion, which may be less than what we might be able to obtain in the open market.
If the U.S. government exercises such march-in rights, we may receive compensation deemed reasonable by the U.S. government in its sole discretion, which may be less than what we might be able to obtain in the open market.
This may lead to breaches of security or privacy, reduced levels of service or experience, loss of intellectual property or exposure of confidential or proprietary information. Sophisticated cyber-attacks, including those using AI, could exacerbate these risks.
These factors may lead to breaches of security or privacy, reduced levels of service or experience, loss of intellectual property or exposure of confidential or proprietary information. Sophisticated cyber-attacks, including those using AI, could exacerbate these risks.
The Delaware Forum Provision and the Federal Forum Provision may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware or the Commonwealth of Massachusetts, as applicable.
The Delaware Forum Provision and the Federal Forum Provision may impose additional litigation costs on shareholders in pursuing any such claims, particularly if the shareholders do not reside in or near the State of Delaware or the Commonwealth of Massachusetts, as applicable.
A third-party manufacturer may also encounter difficulties in production, including: • difficulties with production costs, scale up and yields; • availability of raw materials and supplies; • quality control and assurance; • shortages of qualified personnel; • compliance with strictly enforced regulations that vary in each country where products might be sold; and • lack of capital funding.
A third-party manufacturer may also encounter difficulties, delays or interruptions in production, including: • difficulties with production costs, scale up and yields; • availability of raw materials and supplies; • quality control and assurance; • shortages of qualified personnel; • compliance with strictly enforced regulations that vary in each country where products might be sold; and • lack of capital funding.
Additionally, we may not be able to control for or detect intentional sabotage or negligence by any employee or contractor. Our INT product candidates are uniquely manufactured for each patient using a novel, complex manufacturing process and we may encounter difficulties in production. We custom design and manufacture INTs that are unique and tailored specifically for each patient.
Additionally, we may not be able to control for or detect intentional sabotage or negligence by any employee or contractor. Our INT product candidates are uniquely manufactured for each patient using a novel, complex manufacturing process and we may encounter difficulties in production. We custom design and manufacture INTs tailored for each patient.
Such standards will evolve and subject us and third parties to new or changing requirements. If third parties do not successfully carry out their contractual duties or meet expected deadlines, we may need to replace them, which could cause a delay of the affected clinical trial, drug development program or applicable activity.
Such standards will evolve and subject us and third parties to new or changing requirements. If third parties do not successfully carry out their contractual duties or meet expected deadlines, we may need to replace them, which could delay the affected clinical trial, drug development program or applicable activity.
Any such claims may include allegations of defects in manufacturing or design, a failure to warn of dangers inherent in the product, including as a result of interactions with alcohol or other drugs, knowledge of risks, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts.
Any such claims may include allegations of defects in manufacturing or design, a failure to warn of dangers inherent in the product, including due to interactions with alcohol or other drugs, knowledge of risks, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts.
Additionally, GenAI’s potential for producing false or misleading outputs, reflecting biases or generating content that may not be subject to intellectual property protection or that infringes proprietary rights of others, poses additional risks to our business. Regulatory changes or reinterpretations could introduce new compliance risks, including potential government enforcement actions or civil lawsuits.
Additionally, GenAI’s potential for producing false or misleading outputs, reflecting biases or generating content that may not be subject to IP protection or that infringes proprietary rights of others, poses additional risks to our business. Regulatory changes or reinterpretations could introduce new compliance risks, including potential government enforcement actions or civil lawsuits.
Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar foreign regulatory authorities, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to trial participants, the potential of competing drugs, the existence of uncertainty with respect to our or the proposed collaborator’s ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge , and industry and market conditions generally.
Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or foreign regulators, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to trial participants, the potential of competing drugs, the existence of uncertainty with respect to our or the proposed collaborator’s ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge , and industry and market conditions generally.
A government-mandated or voluntary recall by us or our strategic collaborators could occur as a result of manufacturing errors, design or labeling defects or other deficiencies and issues, as occurred with the recall in 2021 of certain batches of our COVID-19 vaccine shipped to Japan that were found to contain foreign particulate.
A government-mandated or voluntary recall by us or our strategic collaborators could occur because of manufacturing errors, design or labeling defects or other deficiencies and issues, as occurred with the recall in 2021 of certain batches of our COVID vaccine shipped to Japan that were found to contain foreign particulate.
Even if our products demonstrate superiority to those of competitors, consumers and the public may fail to appreciate that benefit, or existing purchase commitments for a competitor’s product may discourage them from purchasing from us. These factors, or the perception of these factors, could lead to a competitor’s vaccine or treatment being more successfully commercialized.
Even if our products demonstrate superiority to those of competitors, consumers, retailers and the public may fail to appreciate that benefit, or existing purchase commitments for a competitor’s product may discourage them from purchasing from us. These factors, or the perception of these factors, could lead to a competitor’s product being more successfully commercialized.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained during patient recruitment for clinical trials.
Risks related to ownership of our common stock The price of our common stock has been volatile, which could result in substantial losses for stockholders. Our stock price has been, and is expected to continue to be, subject to substantial volatility.
Risks related to ownership of our common stock The price of our common stock has been volatile, which could result in substantial losses for shareholders. Our stock price has been, and is expected to continue to be, subject to substantial volatility.
Any such action could cause us to experience delays in the development, production, distribution or export of our products and product candidates and increased expenses. Engaging in acquisitions, joint ventures or strategic collaborations may increase our capital requirements, dilute our stockholders and cause us to incur debt or assume contingent liabilities.
Any such action could cause us to experience delays in the development, production, distribution or export of our products and product candidates and increased expenses. 71 Engaging in acquisitions, joint ventures or strategic collaborations may increase our capital requirements, dilute our shareholders and cause us to incur debt or assume contingent liabilities.
Certain of our strategic alliance agreements may restrict our ability to develop certain products. 60 Our development programs and the potential commercialization of our product candidates will require substantial additional cash to fund expenses.
Certain of our strategic alliance agreements may restrict our ability to develop certain products. Our development programs and the potential commercialization of our product candidates will require substantial cash to fund expenses.
Our reliance on government funding and collaboration from governmental and quasi-governmental entities for certain of our programs adds uncertainty to our research and development efforts with respect to those programs and may impose requirements related to intellectual property rights and requirements that increase the costs of development, commercialization and production of any programs developed under those government-funded programs.
Our reliance on government funding and collaboration from governmental and quasi-governmental entities for certain of our programs adds uncertainty to our research and development efforts with respect to those programs and may impose requirements related to IP rights and requirements that increase the costs of development, commercialization and production of any programs developed under those government-funded programs.
Any data breach, security incident or compromise of confidential, protected or personal information, including any clinical trial participant personal data, may also subject us to civil fines and penalties, litigation, regulatory investigations or enforcement actions, or claims for damages under the GDPR and UK GDPR and relevant member state law in the EU, other foreign laws, and the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), and other relevant state and federal privacy laws in the United States including the California Consumer Privacy Act, as amended by the California Privacy Rights Act (the CCPA).
Any data breach, security incident or compromise of confidential, protected or personal information, including any clinical trial participant personal data, may also result in notification requirements or other disclosure obligations and may subject us to civil fines and penalties, litigation, regulatory investigations or enforcement actions, or claims for damages under the GDPR and UK GDPR and relevant member state law in the EU, other foreign laws, and the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), and other relevant state and federal privacy laws in the United States including the California Consumer Privacy Act, as amended by the California Privacy Rights Act (the CCPA).
Because we are developing some of our product candidates for the treatment of diseases in which there is little clinical experience and, in some cases, using new endpoints or methodologies, the FDA or other regulatory authorities may not consider the endpoints of our clinical trials to provide clinically meaningful results.
Because we are developing some of our product candidates for the treatment of diseases in which there is little clinical experience and, in some cases, using new endpoints or methodologies, the FDA or other regulators may not consider the endpoints of our clinical trials to provide clinically meaningful results.
If we fail to file an invention before a competitor files on the same invention, we no longer have the ability to provide proof that we were in possession of the invention prior to the competitor’s filing date, and thus would not be able to obtain patent protection for our invention.
If we fail to file an invention before a competitor files on the same invention, we no longer can provide proof that we were in possession of the invention prior to the competitor’s filing date, and thus would not be able to obtain patent protection for our invention.
Our results of operations could be adversely affected by general conditions in the global economy and financial markets, including disruptions caused by pandemic, war, conflict or other political instability, including Russia’s invasion of Ukraine and resulting sanctions against Russia or conflict in the Middle East.
Our results of operations could be adversely affected by general conditions in the global economy and financial markets, including disruptions caused by pandemic, war, conflict or other political instability, including related to Russia’s invasion of Ukraine and 75 resulting sanctions against Russia or conflict in the Middle East.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition, we have implemented employee security and awareness training. 79 Management has established a cyber incident response plan (CIRP) designed to assess, identify and manage risks from cybersecurity threats and enable prompt response in the event that a cybersecurity incident is detected.
Biggest changeManagement has established a cyber incident response plan (CIRP) designed to assess, identify and manage risks from cybersecurity threats and enable prompt response in the event that a cybersecurity incident is detected.
Recognizing the threat of security breaches and cyberattacks globally, we have developed a cybersecurity program, overseen by our Chief Information Security Officer (CISO) and Chief Information Officer (CIO), that is designed to protect patient trust, defend the Moderna brand, and reduce the risk and impact of cyber-attacks.
Recognizing the threat of security breaches and cyberattacks globally, we have developed a cybersecurity program, overseen by our Chief Information Security Officer (CISO), that is designed to protect patient trust, defend the Moderna brand, and reduce the risk and impact of cyber-attacks.
Our CISO reports directly to our CIO, who is a member of our Executive Committee and reports to our Chief Executive Officer. We have built a cybersecurity leadership team designed to align with key services, with a separate lead overseeing each service offering, all reporting to the CISO.
Our CISO reports directly to our Chief People and Digital Technology Officer, who is a member of our Executive Committee and reports to our Chief Executive Officer. 77 We have built a cybersecurity leadership team designed to align with key services, with a separate lead overseeing each service offering, all reporting to the CISO.
Our cybersecurity program is informed by industry standards and includes periodic risk assessments and security testing supported by cybersecurity technologies, including third-party security solutions, vulnerability management, and monitoring tools, designed to monitor, identify, and manage risks from cyber threats.
Our cybersecurity program is informed by industry standards and includes periodic risk assessments and security testing supported by cybersecurity technologies, including third-party security solutions, vulnerability management, and monitoring tools, designed to monitor, identify, and manage risks from cyber threats. In addition, we have implemented employee security and awareness training.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Moderna Technology Center (MTC) is located in Norwood, Massachusetts and is primarily comprised of three buildings (MTC South, MTC North and MTC East). The MTC campus is approximately 686,000 square feet which includes lab and office space, directly supporting our manufacturing capabilities and commercial and clinical activities.
Biggest changeThe MTC campus is approximately 722,000 square feet which includes lab and office space, directly supporting our manufacturing capabilities and commercial and clinical activities. In December 2024, we completed the acquisition of the MTC campus, including the underlying land and buildings.
Item 2. Properties We have two main campuses in Massachusetts. During the third quarter of 2023, we commenced a lease for a property in Cambridge, Massachusetts. This building, spanning approximately 462,000 square feet, is designated as our new Moderna Science Center (MSC). The MSC will accommodate a combination of scientific and office spaces, including our principal executive offices.
Item 2. Properties We have two main campuses in Massachusetts. During the third quarter of 2023, we commenced a lease for a property in Cambridge, Massachusetts. This building, spanning approximately 462,000 square feet, is designated as our Moderna Science Center (MSC). The MSC accommodates a combination of scientific and office spaces, including our principal executive offices.
Upon completion, the facility will feature office and mRNA manufacturing areas, including a full manufacturing clean room, quality control laboratories, a just-in-time satellite warehouse, and additional office spaces. We expect the facility to be operational in 2025. This new site is strategically intended to support our INT program.
Upon completion, the facility will have state-of-the-art mRNA manufacturing areas, including a full manufacturing clean room, quality control laboratories, and a just-in-time satellite warehouse. We expect the facility to be operational in 2025. This new site is strategically intended to support our INT program.
We also own and lease various parcels of land, office and lab spaces across the globe for our business operations.
The site strengthens our global manufacturing capabilities and supports the Government of Canada’s pandemic readiness and vaccine supply objectives. We also own and lease various parcels of land, office and lab spaces across the globe for our business operations.
The MTC campus is leased through 2042 and we have the option to extend it for three additional five-year terms. In the second quarter of 2023, we acquired a newly constructed biomanufacturing facility, encompassing 140,000 square feet, in Marlborough, Massachusetts. This facility is undergoing enhancements, including the addition of 60,000 square feet to the existing structure.
This acquisition transitioned the facilities from leased to owned properties, providing greater operational flexibility and long-term stability in supporting our manufacturing and development capabilities. In the second quarter of 2023, we acquired a newly constructed biomanufacturing facility, encompassing 140,000 square feet, in Marlborough, Massachusetts. This facility is undergoing enhancements, including the addition of 60,000 square feet to the existing structure.
The lease has a term of 15 years, with options for us to extend the lease for up to two additional seven-year terms. We expect to begin a phased move-in process starting in early 2024.
The lease has a term of 15 years, with options for us to extend the lease for up to two additional seven-year terms. As of December 31, 2024, we have substantially exited our leased spaces at Technology Square in Cambridge, Massachusetts, completing the consolidation of our Cambridge operations into the MSC.
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Additionally, we occupy a multi-building campus at Technology Square in Cambridge, Massachusetts, consisting of a mix of offices and research laboratory space, totaling approximately 292,000 square feet. The lease will expire in early 2025. The Cambridge campus is the location of our corporate headquarters, platform, drug discovery and clinical development.
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The MSC campus is the location of our corporate headquarters, platform, drug discovery and clinical development. The Moderna Technology Center (MTC) is located in Norwood, Massachusetts and is primarily comprised of three buildings (MTC South, MTC North and MTC East).
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In September 2024, we completed our manufacturing facility in Laval, Quebec, Canada, which received a Drug Establishment License (DEL) from Health Canada. This certification enables the facility to produce drug substance and positions it to manufacture mRNA vaccines, including COVID, RSV, and seasonal influenza, contingent on Health Canada’s approval, starting in 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe complaint seeks a judgment of infringement of the asserted patents and monetary damages, but does not seek to prevent or stop the marketing or sales of our COVID-19 vaccines. Proceedings Related to Patents Owned by Alnylam In March 2022 and July 2022, Alnylam Pharmaceuticals, Inc. (Alnylam) filed two complaints against us in the U.S.
Biggest changeDistrict Court for the District of Delaware asserting that our manufacture and sale of our COVID vaccine willfully infringes certain U.S. patents concerning lipid nanoparticles. The complaint seeks a judgment of infringement of the asserted patents and monetary damages, but does not seek to prevent or stop the marketing or sales of our COVID vaccines.
Also in August 2022, we initiated patent infringement proceedings in Germany (in the Dusseldorf Regional Court), the Netherlands (in the District Court of The Hague) and the UK (in the High Court of Justice of England & Wales) against Pfizer, BioNTech and related entities with respect to certain European patents that also concern our mRNA platform technology and disease-specific vaccine designs, including coronaviruses.
Also in August 2022, we initiated patent infringement proceedings in Germany (in the Dusseldorf Regional Court), the Netherlands (in the District Court of The Hague) and the UK (in the High Court of Justice of England & Wales) against Pfizer, BioNTech and 78 related entities with respect to certain European patents that also concern our mRNA platform technology and disease-specific vaccine designs, including coronaviruses.
District Court for the District of Delaware asserting that our manufacture and sale of our COVID-19 vaccine infringes certain U.S. patents concerning cationic lipids. On August 25, 2023, the Court entered a Final Judgment of non-infringement of all asserted patents in these lawsuits. Alnylam has appealed this judgment to the Federal Circuit Court of Appeals.
District Court for the District of Delaware asserting that our manufacture and sale of our COVID vaccine infringes certain U.S. patents concerning cationic lipids. On August 25, 2023, the Court entered a Final Judgment of non-infringement of all asserted patents in these lawsuits. Alnylam has appealed this judgment to the Federal Circuit Court of Appeals.
Item 3. Legal Proceedings We are involved in various claims and legal proceedings of a nature considered ordinary course in our business, including the 80 intellectual property litigation described below. Most of the issues raised by these claims are highly complex and subject to substantial uncertainties.
Item 3. Legal Proceedings We are involved in various claims and legal proceedings of a nature considered ordinary course in our business, including the intellectual property litigation described below. Most of the issues raised by these claims are highly complex and subject to substantial uncertainties.
(collectively, BioNTech), asserting infringement of certain U.S. patents concerning our mRNA platform technology and disease-specific vaccine designs in Pfizer and BioNTech’s manufacture and sale of their mRNA COVID-19 vaccines. The complaint seeks a judgment of infringement of the asserted patents and monetary damages.
(collectively, BioNTech), asserting infringement of certain U.S. patents concerning our mRNA platform technology and disease-specific vaccine designs in Pfizer and BioNTech’s manufacture and sale of their mRNA COVID vaccines. The complaint seeks a judgment of infringement of the asserted patents and monetary damages.
In May 2023, Alnylam filed a third complaint against us in the U.S. District Court for the District of Delaware asserting three additional U.S. patents concerning cationic lipids. The complaints seek judgments of infringement of the asserted patents and monetary damages, but do not seek to prevent or stop the marketing or sales of our COVID-19 vaccines. Item 4.
In May 2023, Alnylam filed a third complaint against us in the U.S. District Court for the District of Delaware asserting three additional U.S. patents concerning cationic lipids. The complaints seek judgments of infringement of the asserted patents and monetary damages, but do not seek to prevent or stop the marketing or sales of our COVID vaccines.
Mine Safety Disclosures Not applicable. 81 PART II
Mine Safety Disclosures Not applicable. 80 PART II
Proceedings Related to Patents Owned by Arbutus In February 2022, Arbutus Biopharma Corporation (Arbutus) and Genevant Sciences GmbH (Genevant) filed a complaint against us in the U.S. District Court for the District of Delaware asserting that our manufacture and sale of our COVID-19 vaccine willfully infringes certain U.S. patents concerning lipid nanoparticles.
RSV Vaccine Also in October 2024, GSK filed a complaint against us in the U.S. District Court for the District of Delaware asserting that our manufacture and sale of our RSV vaccine infringes certain U.S. patents directed to lipid-mRNA vaccine formulation technology.
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The case has been stayed pending the outcome of two Inter Partes Proceedings (IPRs) pending before the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) regarding the validity of two of the three asserted patents in this lawsuit.
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The PTAB is expected to issue a decision on the IPRs on or before March 6, 2025, which would be subject to appeal.
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There are two patents at issue in the European patent infringement proceedings–EP3590949 (the ‘949 patent), which relates to chemically-modified mRNA and EP3718565 (the ‘565 patent), which relates to coronavirus mRNA vaccines.
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In July 2024, the High Court of Justice of England & Wales issued a judgment confirming the validity of the ‘949 patent and finding that Pfizer and BioNTech had infringed the patent. The court further determined that the ‘565 patent was invalid. The High Court’s decision related to the ‘949 patent is subject to appeal.
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In December 2023, the District Court of The Hague issued a first instance decision determining that the ‘949 patent was invalid in the Netherlands. Moderna has appealed this decision to the Court of Appeal of The Hague, with a second instance decision expected in 2025.
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In addition, there remain ongoing Opposition Proceedings at the European Patent Office by a number of opponents, including Pfizer and BioNTech related to these two patents. Proceedings Related to Patents Owned by Arbutus In February 2022, Arbutus Biopharma Corporation (Arbutus) and Genevant Sciences GmbH (Genevant) filed a complaint against us in the U.S.
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The Court has set trial to begin September 24, 2025, subject to the Court’s availability. Proceedings Related to Patents Owned by GSK COVID-19 Vaccines In October 2024, GlaxoSmithKline Biologicals SA (GSK) filed a complaint against us in the U.S.
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District Court for the District of Delaware asserting that our manufacture and sale of our COVID vaccines infringe certain U.S. patents directed to lipid-mRNA vaccine formulation technology. The complaint seeks a judgment of infringement of the asserted patents and unspecified damages, but does not seek injunctive relief.
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The complaint seeks a judgment of infringement of the asserted patents, unspecified damages and injunctive relief in the United States. Proceedings Related to Patents Owned by Northwestern University In October 2024, Northwestern University filed a complaint against us in the U.S.
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District Court for the District of Delaware asserting that our COVID and RSV vaccines infringe several U.S. patents concerning lipid nanoparticle technology. The complaint seeks a judgment of infringement of the asserted patents and unspecified damages. The complaint does not seek injunctive relief.
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Securities Class Action Litigation In August 2024, a putative shareholder class action complaint was filed against the Company and certain officers in the U.S. District Court for the District of Massachusetts. The action is purportedly brought on behalf of a class of shareholders who purchased Moderna common stock between January 18, 2023 and June 25, 2024.
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The complaint asserts claims under the Securities Exchange Act of 1934 regarding statements about our RSV vaccine (mRNA-1345) and seeks unspecified damages. Derivative Litigation Between September and November 2024, purported shareholder derivative complaints were filed in the U.S. District Court for the District of Massachusetts against certain of our officers and directors and against the Company as a nominal defendant.
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The complaints allege breaches of fiduciary duty and claims under the Securities Exchange Act of 1934 regarding statements about mRNA-1345 and seek declaratory and injunctive relief and unspecified damages payable to us. 79 Proceedings Related to Patents Owned by Alnylam In March 2022 and July 2022, Alnylam Pharmaceuticals, Inc. (Alnylam) filed two complaints against us in the U.S.
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In November 2023, the District Court entered an order of partial dismissal with respect to two of the patents at issue. Subsequently, in October 2024, the District Court entered a final judgment of non-infringement in our favor with respect to the third patent at issue. The decision is subject to appeal. Item 4.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 81 PART II . Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 82 Item 6. [Reserved] 83 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 84 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 99 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 80 PART II . Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 81 Item 6. [Reserved] 82 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 83 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 96 Item 8.
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Financial Statements and Supplementary Data 101 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 140 Item 9A. Controls and Procedures 141 Item 9B. Other Information 143 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 143 PART III . Item 10. Directors, Executive Officers and Corporate Governance 144 Item 11. Executive Compensation 144 Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 144 Item 13. Certain Relationships and Related Transactions, and Director Independence 144 Item 14. Principal Accountant Fees and Services 144 PART IV . Item 15. Exhibits, Financial Statement Schedules 145

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividend Policy We have never declared or paid cash dividends on our common stock and do not expect to pay dividends on our common stock for the foreseeable future. 82 Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans in Item 12 of Part III of this Annual Report on Form 10-K is incorporated herein by reference.
Biggest changeInvestors should not purchase our common stock with the expectation of receiving cash dividends. Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans in Item 12 of Part III of this Annual Report on Form 10-K is incorporated herein by reference. Recent Sales of Unregistered Securities None.
The following graph illustrates a comparison for the five years ended December 31, 2023 of the cumulative total return for our common stock, the Nasdaq Biotechnology Index, and the Standard & Poor’s 500 Stock Index (the S&P 500) each of which assumes an initial investment of $100 and reinvestment of all dividends.
The following graph illustrates a comparison for the five years ended December 31, 2024 of the cumulative total return for our common stock, the Nasdaq Biotechnology Index, and the Standard & Poor’s 500 Stock Index (the S&P 500) each of which assumes an initial investment of $100 and reinvestment of all dividends.
Stockholders We had approximately 75 stockholders of record as of February 16, 2024. Because many of our outstanding shares are held in accounts with brokers and other institutions, the number of beneficial owners is significantly greater than the number of record holders.
Stockholders We had approximately 63 stockholders of record as of February 14, 2025. Because many of our outstanding shares are held in accounts with brokers and other institutions, the number of beneficial owners is significantly greater than the number of record holders.
During the three months ended December 31, 2023, there were no shares repurchased. As of December 31, 2023, $1.7 billion of our Board of Directors’ authorization for repurchases of our common stock remains outstanding, with no expiration date. Refer to Note 12 to consolidated financial statements for information regarding our share repurchase programs.
As of December 31, 2024, $1.7 billion of our Board of Directors’ authorization for repurchases of our common stock remained outstanding, with no expiration date. Refer to Note 12 to consolidated financial statements for information regarding our share repurchase programs.
Investors should not purchase our common stock with the expectation of receiving cash dividends. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities On August 1, 2022, our Board of Directors authorized a share repurchase program for our common stock of up to $3.0 billion, with no expiration date.
Issuer Purchases of Equity Securities On August 1, 2022, our Board of Directors authorized a share repurchase program for our common stock of up to $3.0 billion, with no expiration date. During the three months ended December 31, 2024, there were no shares repurchased.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. 81 Dividend Policy We have never declared or paid cash dividends on our common stock and do not expect to pay dividends on our common stock for the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThis collaboration between Moderna and Immatics centers on combining mRNA technology and T-cell receptor (TCR) platforms to develop cancer therapies, focusing on in vivo expression of TCR bispecifics (TCER ® ), creation of mRNA-based cancer vaccine utilizing extensive tumor data, and enhancing TCR-T cell therapy through combined preclinical and clinical studies. 86 Financial Operations Overview Revenue Net product sales Net product sales by customer geographic location were as follows for the periods presented (in millions): Years Ended December 31, 2023 2022 2021 United States $ 1,720 $ 4,405 $ 5,393 Europe 1,353 6,732 6,834 Rest of world 3,598 7,298 5,448 Total $ 6,671 $ 18,435 $ 17,675 In the third quarter of 2023, we commenced sales of our COVID-19 vaccine to the U.S. commercial market, in addition to continuing sales to foreign governments and organizations.
Biggest changeIn addition, the funding will enable the expansion of clinical studies for up to five additional subtypes of pandemic influenza, enhancing our preparedness to address emerging public health threats. 85 Financial Operations Overview Revenue Net product sales Net product sales by customer geographic location were as follows for the periods presented (in millions): Years Ended December 31, 2024 2023 2022 United States $ 1,726 $ 1,720 $ 4,405 Europe 573 1,353 6,732 Rest of world 810 3,598 7,298 Total $ 3,109 $ 6,671 $ 18,435 Net product sales by product were as follows (in millions): Years Ended December 31, 2024 2023 2022 COVID $ 3,084 $ 6,671 $ 18,435 RSV 25 — — Total $ 3,109 $ 6,671 $ 18,435 As of December 31, 2024, we have two commercial products authorized for use, our COVID vaccine and our RSV vaccine.
Financing activities Our primary financing activities consist of repurchases of common stock, issuance of common stock related to our equity plans, and finance leases.
Financing activities Our primary financing activities consist of issuance of common stock related to our equity plans, repurchases of common stock, and finance leases.
Selling, general and administrative expenses Selling, general and administrative expenses consist primarily of personnel-related costs, including stock-based compensation, for executives, finance, legal, human resources, business development, commercial, marketing, and other administrative and operational functions, professional fees, accounting and legal services, information technology and facility-related costs, and expenses associated with obtaining and maintaining intellectual property (IP).
Selling, general and administrative expenses Selling, general and administrative expenses consist primarily of personnel-related costs, including stock-based compensation, for executives, finance, legal, human resources, business development, commercial, marketing, and other administrative and operational functions, professional fees, accounting and legal services, information technology and facility-related costs, and expenses associated with obtaining, maintaining, and defending intellectual property (IP).
Net product sales Prior to the third quarter of 2023, we sold our COVID-19 vaccine to the U.S. Government, foreign governments and organizations. The agreements and related amendments with these entities generally do not include variable consideration, such as discounts, rebates or returns.
Net product sales Prior to the third quarter of 2023, we sold our COVID vaccine to the U.S. Government, foreign governments and organizations. The agreements and related amendments with these entities generally do not include variable consideration, such as discounts, rebates or returns.
Our cost of sales was $4.7 billion, or 70% of our net product sales, in 2023, including third-party royalties of $301 million, inventory write-downs of $2.2 billion, unutilized manufacturing capacity and wind down costs of $981 million, and losses on firm purchase 93 commitments and cancellation fees of $205 million.
Our cost of sales was $4.7 billion, or 70% of our net product sales, in 2023, including third-party royalties of $301 million, inventory write-downs of $2.2 billion, unutilized manufacturing capacity and wind down costs of $981 million, and losses on firm purchase commitments and cancellation fees of $205 million.
While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies used in the preparation of our consolidated financial statements require the most significant judgments and estimates.
While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policy used in the preparation of our consolidated financial statements require the most significant judgments and estimates.
We believe that our cash, cash equivalents, and investments as of December 31, 2023, together with cash expected to be generated from product sales, will be sufficient to enable us to fund our projected operations and capital expenditures through at least the next 12 months from the issuance of the financial statements included in this Annual Report on Form 10-K.
We believe that our cash, cash equivalents, and investments as of December 31, 2024, together with cash expected to be generated from product sales, will be sufficient to enable us to fund our projected operations and capital expenditures through at least the next 12 months from the issuance of the financial statements included in this Annual Report on Form 10-K.
Since our founding in 2010, we have transformed from a research-stage company advancing programs in the field of mRNA to a commercial enterprise with a diverse clinical portfolio of vaccines and therapeutics across six modalities, a broad intellectual property portfolio and integrated manufacturing capabilities that allow for rapid clinical and commercial production at scale.
Since our founding in 2010, we have transformed from a research-stage company advancing programs in the field of mRNA to a commercial enterprise with a diverse clinical portfolio of vaccines and therapeutics across several modalities, a broad intellectual property portfolio and integrated manufacturing capabilities that allow for rapid clinical and commercial production at scale.
Our cash flows from operating activities are significantly affected by our use of cash for operating expenses and working capital to support the business. Beginning in the third quarter of 2020, we entered into supply agreements with the U.S. Government and foreign governments and organizations for the supply of our COVID-19 vaccine and received upfront deposits.
Our cash flows from operating activities are significantly affected by our use of cash for operating expenses and working capital to support the business. Beginning in the third quarter of 2020, we entered into supply agreements with the U.S. Government, foreign governments and international organizations for the supply of our COVID vaccine and received upfront deposits.
In the third quarter of 2023, we commenced sales of our COVID-19 vaccine to the U.S. commercial market, in addition to continuing sales to foreign governments and organizations. In the U.S., our COVID-19 vaccine is sold primarily to wholesalers and distributors, and to a lesser extent, directly to retailers and healthcare providers.
In the third quarter of 2023, we commenced sales of our COVID vaccine to the U.S. commercial market, in addition to continuing sales to foreign governments and international organizations. In the U.S., our COVID vaccine is sold primarily to wholesalers and distributors, and to a lesser extent, directly to retailers and healthcare providers.
Investigational medicines in later stages of clinical development, such as our RSV vaccine, seasonal flu vaccine, CMV vaccine, new generations of COVID-19 vaccines, combination vaccines, and our INT program, generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
Investigational medicines in later stages of clinical development, such as our norovirus vaccine, seasonal flu vaccine, new generations of COVID vaccines, combination vaccines, CMV vaccine, and our INT program, generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.
We generally do not allocate personnel-related costs, including stock-based compensation, costs associated with our general platform research, technical development, and other shared costs on a program-specific basis. These costs were therefore excluded from the summary of program-specific expenses by modality.
We generally do not allocate personnel-related costs, including stock-based compensation, costs associated with our general platform research, technical development, and other shared costs on a program-specific basis. These costs were therefore excluded from the summary of program-specific expenses by therapeutic area.
These provisions are recorded based on contractual terms and our estimate of returns for product sold during the period, using the expected value method or the most likely amount method. Estimates are assessed each period and adjusted as required to revise information or actual experience.
These provisions are recorded based on contractual terms, our estimate of returns for product sold, and other relevant considerations, during the period, using the expected value method or the most likely amount method. Estimates are assessed each period and adjusted as required to revise information or actual experience.
Please refer to N ote 2 to our consolidated financial statements for further discussion and analysis of each significant category of product sales provisions and the accounting policy. The application of our critical accounting policies necessitates substantial management judgment and estimation, particularly when determining the amount of variable consideration to recognize.
Please refer to Note 2 to our consolidated financial statements for further discussion and analysis of each significant category of product sales provisions and the accounting policy. The application of our critical accounting policies necessitates substantial management judgment and estimation, particularly when determining the amount of variable consideration to recognize.
A discussion regarding our results of operations for the year ended December 31, 2022 compared to 2021 can be found under Part II -Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission (SEC) on February 24, 2023.
A discussion regarding our results of operations for the year ended December 31, 2023 compared to 2022 can be found under Part II -Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (SEC) on February 23, 2024.
The actual amounts we pay in the future to the vendors under such agreements may differ from the cancelable open purchase order amounts of $3.0 billion. In addition to the above obligations, we enter into a variety of agreements and financial commitments in the normal course of business.
The actual amounts we pay in the future to the vendors under such agreements may differ from the cancelable open purchase order amounts of $2.9 billion. In addition to the above obligations, we enter into a variety of agreements and financial commitments in the normal course of business.
Interest income Interest income generated from our investments in marketable securities increased by $221 million in 2023, mainly attributable to an overall higher interest rate environment, partially offset by lower average investment balances.
Interest income Interest income generated from our investments in marketable securities increased by $4 million in 2024, mainly attributable to an overall higher interest rate environment, partially offset by lower average investment balances.
At December 31, 2023, we had cancelable open purchase orders of $3.0 billion in total under such agreements for our clinical operations and support and contract manufacturing. These amounts represent only our estimate of those items for which we 97 had a contractual commitment to pay at December 31, 2023, assuming we would not cancel these agreements.
At December 31, 2024, we had cancelable open purchase orders of $2.9 billion in total under such agreements for our clinical operations and support and contract manufacturing. These amounts represent only our estimate of those items for which we had a contractual commitment to pay at December 31, 2024, assuming we would not cancel these agreements.
Latent and Other Vaccines • Cytomegalovirus (CMV) vaccine: The pivotal Phase 3 study of our CMV vaccine candidate (mRNA-1647) is fully enrolled and accruing cases, evaluating its efficacy, safety and immunogenicity in the prevention of primary infection in women of childbearing age. We anticipate potential efficacy data from the study in 2024.
Latent and Other Vaccines • Cytomegalovirus (CMV) vaccine: The pivotal Phase 3 study of our CMV vaccine candidate (mRNA-1647) is fully enrolled and accruing cases, evaluating its efficacy, safety and immunogenicity in the prevention of primary infection in women of childbearing age.
We have a diverse and extensive development pipeline of 42 development candidates across our 45 development programs, of which 40 are in clinical studies currently. Our COVID-19 vaccine is our first commercial product and is marketed, where approved, under the name Spikevax®.
We have a diverse and extensive development pipeline of 34 development candidates across our 44 development programs, of which 41 are in clinical studies currently. Our COVID vaccine is our first commercial product and is marketed, where approved, under the name Spikevax®.
Recently issued accounting pronouncements See Note 2 - Summary of Significant Accounting Policies, to the consolidated financial statements, under the caption “Recently Issued Accounting Standards Not Yet Adopted”. 92 Results of operations A discussion regarding our results of operations for the year ended December 31, 2023 compared to 2022 is presented below.
Recently issued accounting pronouncements See Note 2 - Summary of Significant Accounting Policies, to the consolidated financial statements, under the caption “Recently Issued Accounting Standards”. Results of operations A discussion regarding our results of operations for the year ended December 31, 2024 compared to 2023 is presented below.
The subjectivity of this process is heightened when assessing factors outside our direct control such as lack of pertinent historical data and limited third-party information. Among all variables, estimating returns presents the most significant judgment due to the broad range of potential outcomes and the current lack of return history with our customers.
The subjectivity of this process is heightened when assessing factors outside our direct control such as the limited historical data, constrained third-party information, and evolving market dynamics. Among all variables, estimating returns presents the most significant judgment due to the broad range of potential outcomes and the current lack of established return trends.
Net cash used in financing activities decreased by $2.1 billion, or 60%, in 2023 compared to 2022, mainly due to a decrease in repurchases of common stock. Operation and funding requirements Our principal sources of funding as of December 31, 2023 consisted of cash and cash equivalents, investments, and cash we may generate from operations.
Net cash provided by financing activities increased by $1.4 billion, or 104%, in 2024 compared to 2023, mainly due to a decrease in repurchases of common stock. Operation and funding requirements Our principal sources of funding as of December 31, 2024 consisted of cash and cash equivalents, investments, and cash we may generate from operations.
Other expense, net Other expense, net consists of interest expense, gains (losses) from the sale of investments in marketable securities, gains (losses) related to changes in fair value of investments in equity securities, and other income and expense unrelated to our core operations.
Other expense, net Other expense, net consists of interest expense, gains or losses related to the sale of investments in marketable securities, changes in fair value of investments in equity securities, foreign currency transactions, remeasurements and hedges, and other income and expense unrelated to our core operations.
Cash flow The following table summarizes the primary sources and uses of cash for the periods presented (in millions): Years Ended December 31, 2023 2022 Net cash (used in) provided by: Operating activities $ (3,118) $ 4,981 Investing activities 4,206 (5,176) Financing activities (1,377) (3,448) Net decrease in cash and cash equivalents $ (289) $ (3,643) 95 Operating activities We derive cash flows from operations primarily from cash collected from customer deposits and accounts receivable, net related to our COVID-19 vaccine product sales, as well as certain government-sponsored and private organizations and strategic alliances.
Cash flow The following table summarizes the primary sources and uses of cash for the periods presented (in millions): Years Ended December 31, 2024 2023 Net cash (used in) provided by: Operating activities $ (3,004) $ (3,118) Investing activities 1,949 4,206 Financing activities 56 (1,377) Net decrease in cash and cash equivalents $ (999) $ (289) Operating activities We derive cash flows from operations primarily from cash collected from customer deposits and accounts receivable related to our product sales, as well as certain government-sponsored and private organizations, strategic alliances and funding arrangements.
Our ongoing work on our RSV, seasonal flu and CMV vaccine candidates, individualized neoantigen therapy, COVID-19 vaccines, including development of any new vaccines against variants of SARS-CoV-2, combination vaccines, late-stage clinical development, and buildout of global commercial, regulatory, sales and marketing infrastructure and manufacturing facilities will require significant cash outflows in future periods, most of which may not be reimbursed or otherwise paid for by our partners or collaborators.
Our ongoing work on our norovirus, flu+COVID combination, CMV, RSV, and next-generation COVID vaccine candidates, INT, development of any new COVID vaccines against variants of SARS-CoV-2, late-stage clinical development, investments in digital capabilities and artificial intelligence technologies, and buildout of global commercial, regulatory, sales and marketing infrastructure and manufacturing facilities will require significant cash outflows in future periods, most of which may not be reimbursed or otherwise paid for by our partners or collaborators.
Our investments, consisting primarily of government and corporate debt securities, are stated at fair value. Cash, cash equivalents and investments as of December 31, 2023 decreased by $4.9 billion, or 27%, compared to December 31, 2022.
Our investments, consisting primarily of government and corporate debt securities, are stated at fair value. Cash, cash equivalents and investments as of December 31, 2024 decreased by $3.8 billion, or 28%, compared to December 31, 2023.
Our effective tax rate for the year ended December 31, 2023 was (19.6)%, which is higher than the statutory rate. It is mainly driven by an increase in valuation allowances on deferred tax assets, partially offset by tax benefits from research and development credits and stock-based compensation.
Our effective tax rate for the year ended December 31, 2024 was 1.3%, which is lower than the statutory rate. It is mainly driven by the increase in valuation allowances on deferred tax assets, partially offset by tax benefits from research and development credits.
Liquidity and capital resources The following table summarizes our cash, cash equivalents, investments and working capital for each period presented (in millions): December 31, 2023 2022 Financial assets: Cash and cash equivalents $ 2,907 $ 3,205 Investments 5,697 6,697 Investments, non-current 4,677 8,318 Total $ 13,281 $ 18,220 Working capital: Current assets $ 10,325 $ 13,431 Current liabilities 3,015 4,923 Total $ 7,310 $ 8,508 Our cash, cash equivalents and investments are invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.
Liquidity and capital resources The following table summarizes our cash, cash equivalents, investments and working capital for each period presented (in millions): December 31, 2024 2023 Financial assets: Cash and cash equivalents $ 1,927 $ 2,907 Investments 5,098 5,697 Investments, non-current 2,494 4,677 Total $ 9,519 $ 13,281 Working capital: Current assets $ 8,099 $ 10,325 Current liabilities 2,206 3,015 Total $ 5,893 $ 7,310 92 Our cash, cash equivalents and investments are invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.
For the year ended December 31, 2023, we recognized net product sales of $6.7 billion from sales of our COVID-19 vaccines, compared to $18.4 billion and $17.7 billion for the years ended December 31, 2022 and 2021, respectively.
Net Product Sales and Net (Loss) Earnings Per Share For the year ended December 31, 2024, we recognized net product sales of $3.1 billion from sales of our COVID and RSV vaccines, compared to $6.7 billion and $18.4 billion for the years ended December 31, 2023 and 2022, respectively.
We generated net income of $8.4 billion and $12.2 billion for the years ended 2022 and 2021, respectively, 96 following the authorization of our first commercial product in December 2020. We also incurred a net loss of $4.7 billion for the year ended December 31, 2023. We have retained earnings of $13.6 billion as of December 31, 2023.
We reported a net loss of $3.6 billion and $4.7 billion for the years ended December 31, 2024 and 2023, respectively. In contrast, we generated net income of $8.4 billion and $12.2 billion for the years ended December 31, 2022 and 2021, respectively, following the authorization of our first commercial product in December 2020.
As a result of the significant reduction in pre-tax income and the valuation allowance, the 2023 effective tax rate is not comparable to the prior year. Please refer to Note 13 to our consolidated financial statements.
As a result of the valuation allowance, the 2024 effective tax rate is not comparable to the prior year. Please refer to Note 13 to our consolidated financial statements for additional details.
As of December 31, 2023, we did not have any off-balance sheet arrangements that were material or reasonably likely to become material to our financial condition or results of operations. 98
As of December 31, 2024, we did not have any off-balance sheet arrangements, other than those obligations and commitments disclosed herein, that were material or reasonably likely to become material to our financial condition or results of operations. 95
There are numerous factors associated with the successful commercialization of any of our investigational medicines, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time due to the early stage of development of many of our investigational medicines.
We expect our research and development costs to be substantial in the near term as our investigational medicines advance through development phases and as we identify and develop additional programs. 88 There are numerous factors associated with the successful commercialization of any of our investigational medicines, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time due to the early stage of development of many of our investigational medicines.
Wholesalers and distributors typically do not make upfront payments to us. As of December 31, 2023, we had $613 million in deferred revenue related to customer deposits received or billable.
We also commenced sales of our RSV vaccine in the third quarter of 2024. Wholesalers and distributors typically do not make upfront payments to us. As of December 31, 2024, we had $188 million in deferred revenue related to customer deposits received or billable.
Our platform builds on continuous advances in basic and applied mRNA science, delivery technology and manufacturing, providing us the capability to pursue in parallel a robust pipeline of new development candidates. We are developing therapeutics and vaccines for infectious diseases, immuno-oncology, rare diseases and autoimmune diseases, independently and with our strategic collaborators.
Our platform builds on continuous advances in basic and applied mRNA science, delivery technology and manufacturing, providing us the capability to pursue in parallel a robust pipeline of new development candidates. We are developing medicines across four franchises: respiratory virus vaccines, latent and other virus vaccines, oncology therapeutics and rare disease therapeutics.
Our original vaccine, mRNA-1273, targeted the SARS-CoV-2 ancestral strain, and we have leveraged our mRNA platform to rapidly adapt our vaccine to emerging SARS-CoV-2 strains to provide protection as the virus evolves and regulatory guidance is updated. 2023 Business Highlights On September 11, 2023, we received approval of the supplemental Biologics License Application from the U.S.
Our original vaccine, mRNA-1273, targeted the SARS-CoV-2 ancestral strain, and we have leveraged our mRNA platform to rapidly adapt our vaccine to emerging SARS-CoV-2 strains to provide protection as the virus evolves and regulatory guidance is updated. In May 2024, the U.S.
Interest expense is primarily derived from our finance leases related to our Moderna Technology Center and certain contract manufacturing service agreements. 90 Critical accounting policies and significant judgments and estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
Critical accounting policies and significant judgments and estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
Shared discovery and development expenses are research and development costs such as personnel-related costs and other costs, which are not otherwise included in development programs, discovery programs, platform research, technical development, certain collaborative and licensing arrangements, and unallocated manufacturing expenses, stock-based compensation, and other expenses. 89 Historically, we have made substantial investments in research and development activities, including development of our platform, mRNA technologies, and manufacturing technologies.
These expenses are not otherwise included in development programs, discovery and platform research, technical development, manufacturing expenses, or stock-based compensation. Historically, we have made substantial investments in research and development activities, including development of our platform, mRNA technologies, and manufacturing technologies.
As of December 31, 2023, we had deferred revenue of $613 million associated with customer deposits received or billable under supply agreements for delivery of our COVID-19 vaccine primarily in 2024.
As of December 31, 2024, we had deferred revenue of $188 million associated with customer deposits received or billable under supply agreements for delivery of our COVID vaccine, with the majority in 2025. Other revenue Other revenue comprises grant revenue, collaboration revenue, and licensing and royalty revenue.
Net cash used by operating activities in 2023 was $3.1 billion and consisted of net loss of $4.7 billion and non-cash adjustments of $1.7 billion, plus a net change in assets and liabilities of $139 million. Non-cash items primarily included deferred income taxes of $828 million, depreciation and amortization of $621 million, and stock-based compensation of $305 million.
Net cash used by operating activities in 2024 was $3.0 billion and consisted of net loss of $3.6 billion and non-cash adjustments of $635 million, plus a net change in assets and liabilities of $78 million. Non-cash items primarily included stock-based compensation of $429 million and depreciation and amortization of $189 million.
In the third quarter of 2023, we commenced sales of our latest COVID-19 vaccine to the U.S. commercial market, in addition to continuing sales to foreign governments and organizations. In the U.S., our COVID-19 vaccine is sold primarily to wholesalers and distributors, and to a lesser extent, directly to retailers and healthcare providers.
We also commenced sales of our RSV vaccine in the third quarter of 2024. In the U.S., our COVID and RSV vaccines are sold primarily to wholesalers and distributors, and to a lesser extent, directly to retailers and healthcare providers.
As we receive more historical data on our product returns, we will integrate this information to refine our estimates and enhance the precision of our financial projections. The actual results could differ from our estimates, and such differences could have a material impact to our financial statements.
While we now have one year of data on our product returns, this remains insufficient to establish reliable patterns. We will continue to enhance our projections as additional information becomes available. The actual results could differ from our estimates, and such differences could have a material impact to our financial statements.
We recognize net product sales when control of the product transfers to the customer, typically upon delivery. Net product sales in the U.S. are recognized net of estimated wholesaler chargebacks, invoice discounts for prompt payments and pre-orders, provisions for sales returns, and other related deductions.
Net product sales are recognized net of estimated wholesaler chargebacks, invoice discounts for prompt payments and pre-orders, provisions for sales returns and government rebates, and other related deductions.
This was partially offset by a change in prepaid expenses and other assets of $2.7 billion primarily driven by inventory write-downs and reductions in vendor down payments, a change in deferred revenue of $2.1 billion due to less revenue recognized from deferred revenue in excess of customer deposits received, and a decrease in deferred income tax assets of $1.4 billion due to an increase in valuation allowance.
This was partially offset by a change in prepaid expenses and other assets of $1.7 billion, mainly due to a decrease in deferred income tax assets in 2023 resulting from the establishment of a valuation allowance and reductions in vendor prepayments, and a change in inventory of $664 million, driven by a smaller reduction in inventory write-downs.
These charges, other than royalties, were largely attributable to a shift in product demand to the latest variant-targeted COVID-19 vaccine and a decline in customer demand, which ultimately led to our strategic initiative implemented in the third quarter of 2023. Cost of sales for 2023 decreased by $723 million, or 13%, compared to 2022.
Charges in 2023, other than royalties, were primarily attributable to a shift in product demand to the latest variant-targeted COVID vaccine and a decline in customer demand, which ultimately led to our strategic initiative implemented in the third quarter of 2023 to optimize our COVID business by resizing manufacturing operations in response to the shift toward an endemic seasonal market.
The program-specific expenses by modality summarized in the table above include expenses we directly attribute to our programs, which consist primarily of external costs, such as fees paid to outside consultants, central laboratories, investigative sites, and CROs in connection with our preclinical studies and clinical trials, CMOs, and allocated manufacturing costs of pre-launch inventory, mRNA supply and consumables.
Program-specific expenses are reflected as of the beginning of the period in which the program was internally advanced to development. The program-specific expenses by therapeutic area summarized in the table above include external development costs, such as fees paid to outside consultants, central laboratories, investigative sites, and CROs in connection with our preclinical studies and clinical trials.
We anticipate a modest reduction in research and development expenses in 2024 compared to the current levels of 2023, as we continue to advance the development of variant-specific and next-generation COVID-19 vaccine candidates and continue to develop our pipeline and advance our product candidates into later-stage development, in particular those in ongoing Phase 3 studies, including our RSV, CMV, seasonal flu and combination vaccine programs, as well as our INT program.
However, we still anticipate incurring a significant amount of research and development expenses in 2025 as we continue to develop our pipeline and advance our product candidates into later-stage development, in particular those in ongoing Phase 3 studies, including our norovirus, flu+COVID combination, CMV, and RSV vaccine programs, as well as our INT program. 91 Selling, general and administrative expenses Selling, general and administrative expenses decreased by $375 million, or 24%, in 2024.
Net cash used in financing activities in 2023 was $1.4 billion, primarily from repurchases of common stock of $1.2 billion and changes in financing lease liabilities of $270 million, partially offset by net proceeds from the issuance of common stock in connection with the exercise of stock options and employee stock purchases under our equity plans of $46 million.
Net cash provided by financing activities in 2024 was $56 million, consisting of net proceeds from the issuance of common stock in connection with the exercise of stock options and employee stock purchases under our equity plans of $66 million.
Other expense, net The following table summarizes other expense, net for the periods presented (in millions): Years Ended December 31, Change 2023 vs. 2022 2023 2022 Change % Loss on investments $ (72) $ (20) $ (52) 260 % Interest expense (38) (29) (9) 31 % Other (expense) income, net (14) 4 (18) (450) % Total other expense, net $ (124) $ (45) $ (79) 176 % Total other expense, net increased by $79 million, or 176%, in 2023.
Other expense, net The following table summarizes other expense, net for the periods presented (in millions): Years Ended December 31, Change 2024 vs. 2023 2024 2023 Change % Loss on investments $ (56) $ (72) $ 16 (22) % Interest expense (24) (38) 14 (37) % Other expense, net (7) (14) 7 (50) % Total other expense, net $ (87) $ (124) $ 37 (30) % Total other expense, net decreased by $37 million, or 30%, in 2024.
Oncology Therapeutics • Individualized Neoantigen Therapy (INT): We continue to demonstrate the potential clinical benefit of our INT program (mRNA-4157), which we are developing in collaboration with Merck. Two separate Phase 3 trials continue to enroll patients with resected high-risk (stage III/IV) melanoma and completely resected stage II, IIIA or IIIB non-small cell lung cancer.
Oncology Therapeutics • Individualized Neoantigen Therapy (INT): We continue to demonstrate the potential clinical benefit of our INT (mRNA-4157). In collaboration with Merck, the Phase 3 clinical trial for adjuvant melanoma is fully enrolled. Two Phase 3 studies for non-small cell lung cancer are enrolling.
We have significant future capital requirements including expected operating expenses to conduct research and development activities, operate our organization, and meet capital expenditure needs. We anticipate maintaining substantial expenses across all areas of our ongoing activities, particularly as we continue research and development of our development candidates and clinical activities for our investigational medicines.
We anticipate maintaining substantial expenses across all areas of our ongoing activities, particularly as we continue research and development of our development candidates and clinical activities for our investigational medicines. This also extends to our manufacturing costs, including our arrangements with our supply and manufacturing partners.
Net cash provided by investing activities in 2023 was $4.2 billion, which primarily included proceeds from maturities of marketable securities of $5.6 billion and proceeds from sales of marketable securities of $3.2 billion, partially offset by purchases of marketable securities of $3.8 billion, and purchases of property, plant and equipment of $707 million.
Net cash flows provided by investing activities decreased by $2.3 billion, or 54%, in 2024 compared to 2023, primarily due to increases in purchases of marketable securities of $2.8 billion, and purchases of property, plant and equipment of $344 million, partially offset by an increase in proceeds from sale of marketable securities of $761 million.
For example, we have experienced a decline in customer demand for our COVID-19 vaccine, reflecting the market's ongoing transition to a seasonal model in an endemic market in 2023. We foresee that our commitment to investing in our business for future product launches may lead to continued negative cash flows from operations in upcoming periods.
We foresee that our commitment to investing in our business for future product launches may lead to continued negative cash flows from operations in upcoming periods.
Discovery program expenses are costs associated with research activities for our programs in the preclinical discovery stage, and primarily consist of external costs for CROs and lab services, and allocated manufacturing cost of preclinical mRNA supply and consumables. Platform research expenses are mainly costs to develop technical advances in mRNA science, delivery science, and manufacturing process design.
Discovery and platform research expenses include costs associated with early-stage research activities for preclinical programs and the development of technical advances in mRNA science, delivery science, and manufacturing process design. These costs include external CRO and lab services, personnel-related costs, computer equipment, facilities, and other administrative costs.
The following table summarizes product sales provision for the periods presented (in millions): Years Ended December 31, 2023 2022 2021 Gross product sales $ 8,203 $ 18,435 $ 17,675 Product sales provision: Wholesaler chargebacks, discounts and fees (976) — — Returns and other fees (556) — — Total product sales provision $ (1,532) $ — $ — Net product sales $ 6,671 $ 18,435 $ 17,675 As of December 31, 2023, our COVID-19 vaccine was our only commercial product authorized for use.
The following table summarizes product sales provision for the periods presented (in millions): Years Ended December 31, 2024 2023 2022 Gross product sales $ 4,517 $ 8,203 $ 18,435 Product sales provision: Wholesaler chargebacks, discounts and fees (1,141) (976) — Returns, rebates and other fees (267) (556) — Total product sales provision (1) $ (1,408) $ (1,532) $ — Net product sales $ 3,109 $ 6,671 $ 18,435 _______ (1) Includes an adjustment of approximately $216 million for the full year 2024, reflecting a reduction in prior year provision estimates, primarily related to returns and chargebacks for the previous COVID vaccine season.
The following table summarizes our consolidated statements of operations for the periods presented (in millions): Years Ended December 31, Change 2023 vs. 2022 2023 2022 Change % Revenue: Net product sales $ 6,671 $ 18,435 $ (11,764) (64) % Other revenue 177 828 (651) (79) % Total revenue 6,848 19,263 (12,415) (64) % Operating expenses: Cost of sales 4,693 5,416 (723) (13) % Research and development 4,845 3,295 1,550 47 % Selling, general and administrative 1,549 1,132 417 37 % Total operating expenses 11,087 9,843 1,244 13 % (Loss) income from operations (4,239) 9,420 (13,659) (145) % Interest income 421 200 221 111 % Other expense, net (124) (45) (79) 176 % (Loss) income before income taxes (3,942) 9,575 (13,517) (141) % Provision for income taxes 772 1,213 (441) (36) % Net (loss) income $ (4,714) $ 8,362 $ (13,076) (156) % Revenue Total revenue decreased by $12.4 billion, or 64%, in 2023, primarily attributable to a significant reduction in net product sales of our COVID-19 vaccine.
The following table summarizes our consolidated statements of operations for the periods presented (in millions): Years Ended December 31, Change 2024 vs. 2023 2024 2023 Change % Revenue: Net product sales $ 3,109 $ 6,671 $ (3,562) (53) % Other revenue 127 177 (50) (28) % Total revenue 3,236 6,848 (3,612) (53) % Operating expenses: Cost of sales 1,464 4,693 (3,229) (69) % Research and development 4,543 4,845 (302) (6) % Selling, general and administrative 1,174 1,549 (375) (24) % Total operating expenses 7,181 11,087 (3,906) (35) % Loss from operations (3,945) (4,239) 294 (7) % Interest income 425 421 4 1 % Other expense, net (87) (124) 37 (30) % Loss before income taxes (3,607) (3,942) 335 (8) % (Benefit from) provision for income taxes (46) 772 (818) (106) % Net loss $ (3,561) $ (4,714) $ 1,153 (24) % Revenue Total revenue decreased by $3.6 billion, or 53%, in 2024, primarily attributable to a significant reduction in net product sales of our COVID vaccine.
For the year ended December 31, 2023, we had a net cash outflow from operations of $3.1 billion, repurchases of our common stock of $1.2 billion, and purchases of property, plant and equipment of $707 million.
For the year ended December 31, 2024, we had a net cash outflow from operations of $3.0 billion, and purchases of property, plant and equipment of $1.1 billion. Working capital, defined as current assets less current liabilities, as of December 31, 2024 decreased by $1.4 billion, or 19%, compared to December 31, 2023.
Our cost of sales was $5.4 billion, or 29% of our net product sales, in 2022, including third-party royalties of $1.1 billion, inventory write-downs of $1.3 billion, unutilized manufacturing capacity and wind down costs of $677 million, and losses on firm purchase commitments and cancellation fees of $725 million.
Operating expenses Cost of sales Our cost of sales was $1.5 billion, or 47% of our net product sales, in 2024, including third-party royalties of $155 million, inventory write-downs of $495 million, primarily for raw materials and our finished and semi-finished COVID vaccine inventory, wind-down costs of $263 million, unutilized manufacturing capacity of $105 million, and losses from non-cancellable raw material purchase commitments of $60 million.
(2) The amounts represent non-cancelable fixed payment obligations related to purchases of raw materials, contract manufacturing services, clinical services and other goods or services in the normal course of business. As of December 31, 2023, $79 million of the purchase commitments related to raw materials was recorded as an accrued liability for loss on future firm purchase commitments.
As of December 31, 2024, $60 million of the purchase commitments related to raw materials was recorded as an accrued liability for loss on future firm purchase commitments and is included in the purchase obligations line above.
In addition, we have substantial facility, lease and purchase obligations. We have also entered into certain collaboration agreements with third parties that include the funding of certain research and development activities and potential future milestone and royalty payments by us.
In addition, we have substantial facility, lease and purchase obligations. We have also entered into various collaboration and licensing agreements, as well as a research and development funding arrangement with a third party. These arrangements collectively encompass the funding of specific research and development activities, with the distinction that under the research and development funding arrangement, we receive funding.
Due to the number of ongoing programs and our ability to use resources across several projects, indirect or shared operating costs incurred for our research and development programs are generally not recorded or maintained on a program- or modality-specific basis. 88 The following table reflects our research and development expenses, including direct program specific expenses summarized by modality and indirect or shared operating costs summarized under other research and development expenses during the years ended December 31, 2023, 2022, and 2021 (in millions): Years Ended December 31, 2023 2022 2021 Program expenses by modality: Infectious disease vaccines $ 2,344 $ 1,734 $ 1,099 Cancer vaccines & therapeutics 70 14 47 Rare disease intracellular therapeutics 75 42 26 Intratumoral immuno-oncology 23 10 20 Inhaled pulmonary therapeutics 17 18 1 Systemic secreted and cell surface therapeutics 33 23 3 Total program-specific expenses by modality (1) $ 2,562 $ 1,841 $ 1,196 Other research and development expenses: Discovery programs $ 106 $ 69 $ 85 Platform research 254 169 125 Technical development and unallocated manufacturing expenses 821 464 275 Shared discovery and development expenses 945 658 242 Stock-based compensation 157 94 68 Total research and development expenses $ 4,845 $ 3,295 $ 1,991 __________ (1) Includes a total of 42 development candidates at December 31, 2023, 45 development candidates at December 31, 2022, and 37 development candidates at December 31, 2021.
Due to the number of ongoing programs and our ability to use resources across several projects, indirect or shared operating costs incurred for our research and development programs are generally not recorded or maintained on a program- or therapeutic area-specific basis. 87 The following table reflects our research and development expenses, including direct program specific expenses summarized by therapeutic area and indirect or shared operating costs summarized under other research and development expenses during the years ended December 31, 2024, 2023, and 2022 (in millions): Years Ended December 31, 2024 2023 2022 Program-specific expenses by therapeutic area: Respiratory vaccines $ 837 $ 1,554 $ 1,363 Latent and other virus vaccines 460 349 133 Oncology 154 62 28 Rare disease and other therapeutics 82 67 12 Total program-specific expenses by therapeutic area (1) $ 1,533 $ 2,032 $ 1,536 Other research and development expenses: Discovery and platform research $ 557 $ 751 $ 397 Technical development and manufacturing expenses 1,081 1,116 713 Shared discovery and development expenses 1,108 789 556 Stock-based compensation 264 157 93 Total research and development expenses $ 4,543 $ 4,845 $ 3,295 __________ (1) Includes a total of 34 development candidates at December 31, 2024, 42 development candidates at December 31, 2023, and 45 development candidates at December 31, 2022.
The increase was primarily due to losses on equity investments and a net realized loss on available-for-sale debt securities as well as an increase in interest expense. Our interest expense is primarily 94 related to our finance leases. The increase in interest expense was driven by new finance leases that commenced in 2023.
The decrease was primarily driven by a reduction in net realized losses on available-for-sale debt securities and lower interest expense. Interest expense, which is primarily related to our finance leases, declined due to the termination or expiration of certain finance leases in 2023. Please refer to Note 10 to our consolidated financial statements for additional information.
Investing activities Our primary investing activities consist of purchases, sales, and maturities of our investments, capital expenditures for land, leasehold improvements, manufacturing, laboratory, computer equipment and software, and business development.
Investing activities Our primary investing activities consist of purchases, sales, and maturities of our investments, capital expenditures for land, building, leasehold improvements, manufacturing, laboratory, computer equipment and software, and business development. 93 Net cash provided by investing activities in 2024 was $1.9 billion, which primarily included proceeds from maturities of marketable securities of $5.6 billion and proceeds from sales of marketable securities of $4.0 billion, partially offset by purchases of marketable securities of $6.5 billion, and purchases of property, plant and equipment of $1.1 billion.
Other revenue Other than net product sales, our revenue has been primarily derived from government-sponsored and private organizations including the Biomedical Advanced Research and Development Authority (BARDA), the Defense Advanced Research Projects Agency (DARPA) and the Bill & Melinda Gates Foundation and from strategic alliances with Merck & Co., Inc (Merck), Vertex Pharmaceuticals Incorporated and Vertex Pharmaceuticals (Europe) Limited (together, Vertex) and others to discover, develop, and commercialize potential mRNA medicines. 87 The following table summarizes other revenue for the periods presented (in millions): Years Ended December 31, 2023 2022 2021 Grant revenue $ 94 $ 388 $ 735 Collaboration revenue 83 440 61 Total other revenue $ 177 $ 828 $ 796 Cost of sales Cost of sales includes raw materials, personnel and facility and other costs associated with manufacturing our commercial products.
Grant and collaboration revenues have been primarily derived from government-sponsored and private organizations including the Biomedical Advanced Research and 86 Development Authority (BARDA), the Defense Advanced Research Projects Agency (DARPA) and the Gates Foundation and from strategic alliances with Merck & Co., Inc (Merck), Vertex Pharmaceuticals Incorporated and Vertex Pharmaceuticals (Europe) Limited (together, Vertex) and others to discover, develop, and commercialize potential mRNA medicines.
This was partially offset by a decrease in short-term deferred revenue of $1.5 billion, mainly driven by revenue recognized from deferred revenue in excess of customer deposits received.
These decreases were partially offset by a $415 million reduction in short-term deferred revenue, mainly resulting from revenue recognized from deferred revenue in excess of customer deposits received, and a $371 million decrease in accrued liabilities, reflecting an overall reduction in spend.
These costs relate to the operation of the business, unrelated to the research and development function, or any individual program. We anticipate selling, general and administrative expenses to decrease marginally in 2024 compared to 2023. This is due to the continued development of our programs and preparations for commercial activities both within and outside the United States.
These costs relate to the operation of the business, unrelated to the research and development function, or any individual program. Prior to 2024, selling, general and administrative expenses increased annually as we expanded our commercial infrastructure to support the global commercialization of our COVID vaccine.
In the U.S., our COVID-19 vaccine is now sold primarily to wholesalers and distributors, and to a lesser extent, directly to retailers and healthcare providers. Net product sales are recognized net of estimated wholesaler chargebacks, invoice discounts for prompt payments and pre-orders, provisions for sales returns, and other related deductions. Please refer to Note 3 to our consolidated financial statements.
In the U.S., our COVID vaccine and RSV vaccine are sold primarily to wholesalers and distributors, and to a lesser extent, directly to retailers and healthcare providers. We recognize net product sales when control of the product transfers to the customer, typically upon delivery.
The decrease in cost of sales was primarily driven by lower sales volume, partially offset by an increase in inventory write-downs. Cost of sales as a percentage of net product sales for 2023 increased by 41 percentage points to 70% from 29% in 2022.
The decrease in cost of sales as a percentage of net product sales was primarily attributable to these reduced costs, partially offset by the lower product sales. In 2025, we anticipate a reduction in cost of sales, primarily due to lower anticipated product sales.
The net change in assets and liabilities was primarily due to a decrease in deferred revenue of $2.1 billion due to revenue recognized upon shipments of our COVID-19 vaccine, partially offset by a decrease in prepaid expenses and other assets of $1.0 billion, primarily driven by write-downs of long term inventory, decrease in income tax receivable due to receipt of tax refunds and decrease in pre-tax income, and reductions in vendor prepayments and down payments as well as a decrease in inventory of $747 million due to inventory write-downs.
These were partially offset by a decrease in accounts receivable of $534 million, mainly due to timing of collections, a decrease in prepaid expenses and other assets of $145 million, primarily driven by reductions in vendor prepayments, as well as a decrease in inventory of $83 million, largely due to inventory sold and write-downs.
Please refer to Note 10 to our consolidated financial statements. Provision for income taxes Provision for income taxes decreased by $441 million, or 36%, in 2023, primarily due to a significant decrease in pre-tax income, partially offset by an increase in valuation allowance on deferred tax assets of $2.1 billion.
Provision for income taxes Provision for income taxes decreased by $818 million, or 106%, in 2024, primarily due to the establishment of a $1.7 billion valuation allowance on deferred tax assets in the third quarter of 2023. This valuation allowance has been applied consistently since its initial recognition.
In light of our recent strategic initiative implemented in the third quarter of 2023, we expect a reduction in our cost of sales as a percentage of net product sales for the full year 2024, compared to the full year 2023. Research and development expenses Research and development expenses increased by $1.6 billion, or 47%, in 2023.
However, we expect cost of sales as a percentage of net product sales to increase compared to 2024, driven by excess manufacturing capacity and the impact of fixed costs being allocated across a lower sales volume. Research and development expenses Research and development expenses decreased by $302 million, or 6%, in 2024.
We have filed for a Biologics License Application to the FDA for our RSV vaccine for adults aged 60 years or older, and used a Priority Review Voucher to accelerate review. We have also submitted marketing authorization applications for the vaccine for adults aged 60 years or older to medical authorities in several countries beyond the U.S.
We have filed for regulatory approval of mRNA-1283 with the FDA using a priority review voucher. The FDA has accepted our Biologics License Application (BLA) for mRNA-1283 and has assigned a PDUFA goal date of May 31, 2025. • RSV vaccine: We received regulatory approval of our RSV vaccine mRESVIA (mRNA-1345) for adults aged 60 years and older in 2024.
We are in discussions with regulators and intend to file in 2024. • Seasonal flu + COVID-19 vaccine: The Phase 3 trial of our combination vaccine candidate against seasonal flu and COVID-19 (mRNA-1083) is fully enrolled. We anticipate data from the study in 2024.
We remain blinded and anticipate final efficacy data from the study in 2025. • Norovirus vaccine: The two-season Phase 3 study evaluating the efficacy, safety and immunogenicity of our trivalent vaccine candidate against norovirus (mRNA-1403) is fully enrolled in the Northern Hemisphere and we are preparing second season enrollment in the Southern Hemisphere.
Working capital, which is current assets less current liabilities, as of December 31, 2023 decreased by $1.2 billion, or 14%, compared to December 31, 2022, primarily due to a decrease in cash, cash equivalents and short-term investments of $1.3 billion, primarily to fund our operating activities and repurchases of our common stock, a decrease in inventory of $747 million, a decrease in prepaid and other current assets of $568 million, and a decrease in accounts receivable, net of $493 million.
This was primarily due to a $1.6 billion decrease in cash, cash equivalents and short-term investments, mainly used to fund our operating activities, and a $534 million decrease in accounts receivable, primarily driven by timing of collections.
The increase was primarily attributable to increases in clinical trial expenses of $411 million, clinical manufacturing expenses of $335 million, personnel-related costs of $286 million, and consulting and outside services of $267 million.
The decrease was primarily attributable to decreases in clinical trial expenses of $427 million, clinical manufacturing expenses of $286 million, and preclinical research expenses of $246 million. These reductions were partially offset by an increase of $231 million in personnel-related costs, including stock-based compensation, and the purchase of two priority review vouchers.
Contractual obligations and commitments The following table summarizes our contractual obligations as of December 31, 2023 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods (in millions): Payments Due by Period Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years Operating leases $ 1,133 $ 72 $ 134 $ 142 $ 785 Financing leases ( 1) 1,184 20 44 46 1,074 Purchase obligations (2) 2,103 1,002 685 272 144 Total contractual cash obligations $ 4,420 $ 1,094 $ 863 $ 460 $ 2,003 _______ (1) The amounts in the table include a total payment of $668 million associated with our MTC leases for the optional lease extension periods.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. 94 Contractual obligations and commitments The following table summarizes our contractual obligations as of December 31, 2024 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods (in millions): Payments Due by Period Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years Operating leases $ 1,129 $ 64 $ 149 $ 162 $ 754 Financing leases 67 26 41 — — Purchase obligations (1) 1,045 601 439 5 — Total contractual cash obligations $ 2,241 $ 691 $ 629 $ 167 $ 754 _______ (1) The amounts represent non-cancelable fixed payment obligations related to purchases of raw materials, contract manufacturing services, research and development and other goods or services in the normal course of business.
We anticipate data from the study in the first half of 2024. • Seasonal flu vaccine: Our seasonal flu vaccine candidate (mRNA-1010) demonstrated consistently acceptable safety and tolerability across three Phase 3 trials.
We have filed with the FDA for regulatory approval of mRNA-1083, which may require vaccine efficacy data from our ongoing Phase 3 seasonal flu vaccine study. • Seasonal flu vaccine: We have shared positive Phase 3 immunogenicity and safety data for our seasonal flu vaccine (mRNA-1010).
Removed
Food and Drug Administration (FDA) for our updated COVID-19 vaccine, which targets the Omicron XBB.1.5 sublineage of SARS-CoV-2 (mRNA-1273.815), for individuals 12 years and older. The FDA also issued an Emergency Use Authorization for mRNA-1273.815 for children aged 6 months to 11 years old.
Added
Food and Drug Administration (FDA) granted approval for mRESVIA® (mRNA-1345), our mRNA vaccine against respiratory syncytial virus (RSV), to protect adults aged 60 and older from lower respiratory tract disease caused by RSV infection.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+2 added−8 removed5 unchanged
Biggest changeAs we pursue our international expansion strategy, our results of operations and cash flows remain subject to fluctuations in foreign currency exchange rates. To manage the exposure to foreign currency exchange rate fluctuations, we have implemented cash flow hedging and balance sheet hedging programs.
Biggest changeCollectively, these factors expose us to risks associated with fluctuations in foreign currency exchange rates, which may impact our results of operations and cash flows. To manage this exposure, we have focused on balance sheet hedging activities as part of our strategy to address foreign currency fluctuations.
We believe the counterparties to 99 our foreign currency forward contracts are creditworthy multinational commercial banks. While we believe the risk of counterparty nonperformance is not material, a sustained decline in the financial stability of financial institutions as a result of disruption in the financial markets could affect our ability to secure creditworthy counterparties for our foreign currency hedging programs.
We believe the counterparties to our foreign currency forward contracts are creditworthy multinational commercial banks. While we believe the risk of counterparty nonperformance is not material, a sustained decline in the financial stability of financial institutions as a result of disruption in the financial markets could affect our ability to secure creditworthy counterparties for our foreign currency hedging programs.
We expect that any increase or decrease in the fair value of the portfolio would be substantially offset by increases or decreases in the underlying exposures being hedged. 100
We expect that any increase or decrease in the fair value of the portfolio would be substantially offset by increases or decreases in the underlying exposures being hedged. 96
As of December 31, 2023, our outstanding balance sheet hedging derivatives, carried at fair value, had maturities of less than three months. We enter into these foreign exchange contracts to hedge our forecasted revenue and monetary assets and liabilities denominated in foreign currency in the normal course of business and accordingly, they are not speculative in nature.
As of December 31, 2024, our outstanding balance sheet hedging derivatives, carried at fair value, had maturities of less than three months. We enter into these foreign exchange contracts to hedge our monetary assets and liabilities denominated in foreign currency in the normal course of business and accordingly, they are not speculative in nature.
If market interest rates were to increase immediately and uniformly by one percentage point from levels at December 31, 2023, the net fair value of our marketable securities would decrease by approximately $83 million. Foreign Currency Risk We transact business in various foreign currencies and have international sales and expenses denominated in foreign currencies.
If market interest rates were to increase immediately and uniformly by one percentage point from levels at December 31, 2024, the net fair value of our marketable securities would decrease by approximately $53 million. Foreign Currency Risk We transact business in various foreign currencies and have international sales and expenses denominated in foreign currencies.
As of December 31, 2023, a hypothetical adverse movement of 10 percent in foreign currency exchange rates compared to the U.S. dollars across all maturities would have resulted in potential declines in the fair value on our foreign currency forward contracts used in balance sheet hedging of approximately $23 million.
As of December 31, 2024, a hypothetical adverse movement of 10 percent in foreign currency exchange rates compared to the U.S. dollars across all maturities would have resulted in potential declines in the fair value on our foreign currency forward contracts used in balance sheet hedging of approximately $36 million.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk As of December 31, 2023 and 2022, we had cash, cash equivalents, restricted cash, and investments in marketable securities of $13.3 billion and $18.2 billion, respectively. Our investment portfolio comprises money market funds and marketable debt securities (including U.S.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk As of December 31, 2024 and 2023, we had cash, cash equivalents, restricted cash, and investments in marketable securities of $9.5 billion and $13.3 billion, respectively. Our investment portfolio comprises money market funds and marketable debt securities (including U.S.
Therefore, we are exposed to certain risks arising from both our business operations and economic conditions. For the year ended December 31, 2023, our revenue generating activities and operations continued to be primarily denominated in U.S. dollars.
Therefore, we are exposed to certain risks arising from both our business operations and economic conditions. For the year ended December 31, 2024, our revenue generating activities and operations continued to be primarily denominated in U.S. dollars. However, we maintained a significant exposure to foreign currency risk, particularly in the Australian dollar, Brazilian real, British pound, and Canadian dollar markets.
Foreign currency hedging activities were immaterial during 2023. Balance Sheet Hedging Activities We enter into foreign currency forward contracts to hedge fluctuations associated with foreign currency denominated monetary assets and liabilities, primarily cash, accounts receivable, accounts payable and lease liabilities in Euro, Swiss Franc and Japanese Yen, that are not designated for hedge accounting treatment.
Balance Sheet Hedging Activities We enter into foreign currency forward contracts to hedge fluctuations associated with foreign currency denominated monetary assets and liabilities, primarily cash, receivables, payables and lease liabilities in the Australian dollar, Brazilian real, British pound, and Canadian dollar, that are not designated for hedge accounting treatment.
Removed
However, we maintained a significant exposure to foreign currency risk, particularly in the Euro, Japanese Yen and Swiss Franc markets, Our significant foreign currency revenue exposure was the equivalent of $1.4 billion in Japanese Yen and $518 million in Euros for 2023.
Added
As our business evolves, we have transitioned to receiving payments in local currencies rather than U.S. dollars. In addition, we operate in foreign countries and are establishing manufacturing facilities in Canada, Australia, and the United Kingdom, where we also transact in foreign currencies.
Removed
Cash Flow Hedging Activities We mitigate the foreign exchange risk arising from the fluctuations in foreign currency denominated product sales in Euro and Japanese Yen through a foreign currency cash flow hedging program, using forward contracts and foreign currency options that do not exceed 15 months in duration.
Added
While cash flow hedging programs are in place, there were no foreign currency cash flow hedging activities during 2024.
Removed
We hedge these cash flow exposures to reduce the risk that our earnings and cash flows will be adversely affected by changes in exchange rates. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions.
Removed
The derivative assets or liabilities associated with our hedging activities are recorded at fair value in prepaid expenses and other current assets or other current liabilities, respectively, in our consolidated balance sheets.
Removed
The gains or losses resulting from changes in the fair value of these hedges are initially recorded as a component of accumulated other comprehensive (loss) income (AOCI) in stockholders’ equity and subsequently reclassified to product sales in the period during which the hedged transaction affects earnings.
Removed
In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, within the defined hedge period, we reclassify the gains or losses on the related cash flow hedge from AOCI to other expense, net, in our consolidated statements of operations.
Removed
We evaluate hedge effectiveness at the inception of the hedge prospectively, and on an on-going basis both retrospectively and prospectively.
Removed
If we do not elect hedge accounting, or the contract does not qualify for hedge accounting treatment, the changes in fair value from period to period are recorded as a component of other expense, net, in our consolidated statements of operations. We had no outstanding foreign currency forward contracts or foreign currency options as of December 31, 2023.

Other MRNA 10-K year-over-year comparisons