Moderna shares fall as FDA refusal to review flu vaccine adds to regulatory uncertainty

By Mariam Sunny and Rashika Singh

Feb 11 (Reuters) - Shares of Moderna MRNA.O slumped nearly 7% on Wednesday after U.S. regulators refused to review its experimental flu vaccine, a decision that underscores changing U.S. vaccination policies and deepens uncertainty around the company's mRNA ambitions.

Sweeping changes to U.S. vaccine policy under Health Secretary Robert F. Kennedy Jr., a longtime anti-vaccine activist, have led to reduced vaccine usage and reshaped the regulatory landscape for companies developing new shots.

"This is a very worrisome event which does not bode well for 'standard' operations and decision making within FDA," said Wilbur Chen, infectious disease physician at the University of Maryland School of Medicine, adding that it "probably reflects this new regulatory framework" and is likely to impact other vaccines going forward.

The U.S. Food and Drug Administration's decision deals a blow to the cash-strapped biotech's ambitions to plug the decline in its COVID-19 vaccine revenue and demonstrate the long-term viability of its mRNA platform.

"I am concerned that if the next step in this process doesn't support moving forward this product to review we may have lost the mRNA platform as an option for flu or other respiratory viruses," said Dr. Demetre Daskalakis, former CDC director of the National Center for Immunization and Respiratory Diseases.

Last year, the Department of Health and Human Services wound down mRNA vaccine development projects worth nearly $500 million under its biomedical research unit.

In an interview with Bloomberg TV earlier this year, Moderna said it does not plan to invest in new late-stage vaccine trials because of growing opposition to immunizations from U.S. officials.

In a letter signed by the FDA's top vaccine official, Vinay Prasad, the agency cited the lack of an "adequate and well-controlled" study with a comparator arm that "does not reflect the best-available standard of care."

Prasad overruled the agency's scientists in refusing to accept Moderna's application, Stat News reported on Wednesday, citing three agency officials familiar with the matter.

The U.S. Department of Health and Human Services, which oversees the FDA, did not immediately respond to a Reuters request for comment.

The FDA's decision "throws a wrench into the company's reliance on seasonal vaccines to reach its 2028 cash break-even goal," said Citi analyst Geoff Meacham.

The regulator's decision now puts Moderna's global revenue expectations at about $750 million from the flu shot and the flu/COVID combination vaccine in 2028 and their U.S. commercialization in limbo, Citi analysts said.

Several FDA-approved flu vaccines, including those produced by the UK's AstraZeneca AZN.L and Sanofi SASY.PA, are currently available in the U.S. market.

Moderna's shares fell 29% in 2025.