Moderna looks outside US for growth after FDA's flu shot refusal

By Mariam Sunny and Michael Erman

Feb 13 (Reuters) - Moderna MRNA.O said it is looking for growth overseas after the U.S. FDA refused to review its experimental flu shot and the country's top health officials have deprioritized vaccination.

The vaccine maker expects to leverage its partnership with governments in the U.K., Canada, and Australia as well as the expansion of its next-generation COVID-19 vaccine to drive growth this year.

Moderna forecast up to 10% revenue growth in 2026 compared to last year, driven primarily by international sales.

Shares of Moderna rose more than 10% on Friday after having fallen as much as 12% following the U.S. flu shot rejection before trimming those losses.

Moderna now expects roughly half its revenue to come from the U.S., down from about 62% last year.

This follows the Food and Drug Administration's refusal earlier this week to review its flu vaccine application, citing flaws in the trial design.

"Sustained regulatory uncertainty threatens U.S. leadership in innovative medicines," CEO Stephane Bancel said, adding that the current climate could mean transformative therapies from U.S. companies will reach patients overseas before becoming available in the United States.

The company has been counting on its flu vaccine and a future COVID-flu combination shot to help it return to revenue growth as demand for COVID vaccines collapsed in the years following the pandemic revenue windfall, taking its share price with it. Moderna shares have plummeted 90% from 2021 highs.

Vinay Prasad, a COVID-vaccine critic who now serves as the FDA's top vaccine official, said on Tuesday the company in its clinical trial should have compared the flu vaccine to a higher-dose shot often given to older people, even though that is not available in many countries where Moderna conducted its trial.

The company said the FDA had deemed the trial design adequate when the study began 18 months ago.

Barclays analysts said the refusal adds uncertainty to Moderna's U.S. respiratory franchise, even as COVID vaccine revenue may edge higher overseas in 2026.

TOUGH U.S. LANDSCAPE

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.

"When expectations and review time lines are unpredictable, companies face greater risk and can hesitate to invest, slowing the development of breakthrough medicines," Bancel said on a call with analysts.

Kennedy, a fierce critic of the mRNA technology used in Moderna's vaccines, oversaw the Department of Health and Human Services' cancellation of a $600 million government contract to develop mRNA vaccines against avian flu and other high‑risk strains.

Moderna said last month it would halt new late-stage vaccine investments due to growing opposition from U.S. officials.

The company is working to cut costs and advance new products to return to growth and prove the long-term viability of mRNA technology, which was used in most COVID shots and credited with saving millions of lives.

Moderna is betting heavily on oncology and rare diseases, advancing individualized cancer vaccines with partner Merck MRK.N and exploring mRNA therapeutics for metabolic disorders.

Analysts are awaiting late-stage data, possibly this year, on skin cancer vaccine intismeran autogene. Barclays said a successful outcome from the study could significantly improve sentiment and potentially double the share price.

Moderna reported fourth-quarter revenue of $678 million, above Wall Street estimates of $626.1 million, based on LSEG data.

The company reported a quarterly loss of $2.11 per share, compared with a $2.91 per share loss a year earlier.