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Hindustan Times
15 hours ago
- Business
- Hindustan Times
How Moderna Went From Pandemic Hero to Vaccine Victim
The Trump administration is seeking to reshape the regulation, recommendations and development of vaccines. Moderna was once a darling of the first Trump administration, which went to great lengths to help the company develop its Covid-19 vaccine that protected millions of people from the virus. Now the biotech is caught in the crossfire of Trump 2.0 as vaccine-making comes under fire. In the latest setback for Moderna, the Food and Drug Administration on Friday approved its next-generation Covid shot for a narrower population of patients than the company intended. The approval grants use of the vaccine only in older adults and people aged 12 to 64 with health risks. Moderna is in a precarious position. The company bet big on mRNA, the underlying technology powering its vaccines, to develop shots that could treat or prevent different diseases. But after securing riches from its Covid shot, it failed to diversify its pipeline. That has become detrimental for Moderna as the Trump administration casts a critical eye on the technology and seeks to reshape the regulation, recommendations and development of vaccines. The Department of Health and Human Services recently canceled a contract worth $766 million that was awarded to Moderna to develop mRNA-based vaccines for pandemic-level influenza including bird flu. The FDA released a new framework for approving Covid vaccines, introducing more stringent rules that require more testing. And Moderna withdrew its application with the FDA for its flu-Covid combo shot, which analysts said could have been because it fell short of the new standards. The beleaguered company is seeking to cut costs and find a path forward postpandemic. Its shares have fallen about 35% this year because of low demand for the Covid shot and disappointing sales of its respiratory-syncytial-virus vaccine. Moderna's share price, which peaked in 2021 at $484, has dropped to prepandemic levels of about $25. 'It's just a bad time to be in the vaccine business,' said Jared Holz, healthcare strategist at financial firm Mizuho. 'The proclivity that this administration has shown is certainly not in their favor.' HHS will continue to seek advancements through evidence-based technologies that meet the gold standard of science, a spokeswoman said. Moderna's troubles underscore just how much the regulatory environment has shifted since Trump's re-election. The new framework for vaccine approval requires new Covid shots for certain children and adults to undergo randomized, controlled trials. HHS Secretary Robert F. Kennedy Jr., a longtime vaccine skeptic, said recently that certain shots for respiratory diseases including mRNA vaccines have 'never worked.' In mid-May, Kennedy said the Centers for Disease Control and Prevention would no longer recommend that pregnant women and children get Covid-19 vaccines as a matter of routine. The industry is also navigating an FDA that has shed thousands of workers. While many vaccine makers, including Pfizer, face government headwinds, most are better positioned because they sell more products. Moderna has just three approved vaccines and has been struggling to advance its pipeline, which includes treatments for cancer and rare diseases and vaccines for a herpes virus and Lyme disease. In withdrawing the approval application for a flu-Covid vaccine, Moderna said it did so after consulting with the FDA, which asked for more flu data, and would resubmit after study results come later this year. The government contract was awarded during the Biden administration, and the bird-flu shot showed positive results in an early-stage study, Moderna said. But the government terminated the contract after it concluded that the bird-flu vaccine 'was not scientifically or ethically justifiable,' an HHS spokesman said at the time. 'This is not simply about efficacy—it is about safety, integrity and trust,' he said, adding that mRNA 'remains under-tested.' A Moderna spokesman said the 'results during the pandemic speak for themselves, including demonstrated efficacy and a safety profile established in over a billion people worldwide.' Moderna Chief Executive Stephane Bancel said at an investor conference in May that the new administration seems focused on Covid vaccination for people at high risk, a goal he said is a 'net positive' and a large market. Bancel said in an interview in May that Moderna understands it has the burden of proving the safety and efficacy of its products that are based on a newer technology. 'We have exactly the same goal,' Bancel said. 'We wouldn't want to put on the market a product that is not efficacious, that is not safe.' Before the pandemic made Moderna a household name, the company had no FDA-approved products. Then, in 2020, the biotech won billions for Covid vaccine development as part of Trump's Operation Warp Speed, which helped support vaccine testing in thousands of people. Moderna's Covid vaccine went on to be used globally and has been credited with saving millions of lives. The vaccine pushed Moderna's annual sales to nearly $20 billion for two years, and its staff grew to 5,800 people. Moderna made their next goal treating or preventing certain diseases by doubling down on mRNA technology. But development of new mRNA products has been slow. Some studies for other vaccines haven't yielded the data Moderna hoped for and others hit regulatory setbacks. Moderna's vaccine for RSV has struggled to gain market share against shots from Pfizer and GSK, with underwhelming sales. Meanwhile, the company didn't use its cash to expand beyond mRNA, leaving it dependent on one technology for growth. 'They built a tank for the war, and now the war is over,' Holz said. 'They don't, in my mind, really have a business anymore.' Last fall, Moderna said it would cut research costs by 20% and some staff, and trim its pipeline of experimental drugs. It began 2025 by slashing its guidance and pledged another $1 billion in cost cuts. The company has also continued spending on drug development. It had $8.4 billion on hand as of March 31, down from $9.5 billion three months earlier. Holz said that Moderna must raise money or issue debt, because it is on track to run out of cash in 18 months. Moderna has said it expects to end the year with about $6 billion in cash and investments, and plans to reduce spending and stop losing money in 2028. Moderna has also said it isn't going to raise more equity. Moderna's future hinges on whether its vaccines in development pan out, as well as whether there is more uptake of the new Covid shot and potential expansion of its RSV shot. The FDA is set to rule on that expansion in June. Write to Jared S. Hopkins at and Peter Loftus at Get 360° coverage—from daily headlines to 100 year archives.
Yahoo
20-05-2025
- Business
- Yahoo
UnitedHealth's struggles dragged down the major Wall Street indexes. Here's what went wrong.
In November 2024, UnitedHealth Group's (UNH) stock appeared to be on an unstoppable upward trajectory, reaching an all-time high of $625 per share. It had seemingly survived the largest cyberattack in healthcare history and overcame two years of elevated Medicare Advantage costs — a headwind that plagued the entire insurance industry last year. "The stock shakes off almost every fundamental issue/set-back and still manages to outperform most peers," wrote Mizuho healthcare equity strategist Jared Holz in a note to clients on Nov. 10, 2024. The next day, the company reached its all-time high of $625 per share and a market cap of $575 billion. Six months later, that has all come crashing down. The megacap was trading at about half its November share price, at $311 per share Monday, and now has a market cap of just $286 billion. The losses weighed heavily on indexes last week, and UnitedHealth was blamed for dragging down both the Dow and the S&P healthcare subsector. So, how did the company that was riding high — boasting 10% of all physicians in the US having ties to its OptumHealth business and projected to be the first trillion-dollar healthcare company by market cap — spiral in just a matter of six months? What caused the spectacular sell-off is a confluence of factors that began with the cyberattack. Here's a brief timeline of key events that caused the stock to slip: Feb. 2024: Change Healthcare subsidiary cyberattack halts payments to providers. July 2024: UnitedHealth forecasts a greater-than-expected hit from the cyberattack. Dec. 2024: Insurance CEO Brian Thompson killed on investor day in New York City. April 2024: UHG misses earnings, stock drops 20%. May 2025: CEO shake-up; Department of Justice is reportedly pursuing a criminal investigation of UHG's Medicare Advantage practices. The first hit in Feb. 2024, when the cyberattack halted a key payment system for health providers around the country, prompted a US Health Department (HHS) investigation, a congressional inquiry, and a need for the federal government to step in to help process Medicare and Medicaid payments for several months. Initially, UnitedHealth denied that patient information had been breached in the attack. It later admitted that the breach affected 190 million patients and forecast a greater financial burden from the attack. Investors continued to sell the stock, but some believed it would recover and was worth buying. "The impact ($0.80/share) is being absorbed by UNH's pricing power and cost-cutting measures. [UNH] boosted reserves by $800 million post-attack," according to Shams Afzal, managing director and portfolio manager at Carnegie Investment Counsel, in a note in June. Just as others did at the time, he recommended that "if you're considering investing in a health insurer, UNH is a strong choice." Then, just as investors seemed ready to forgive and forget, the company suffered a tragic leadership loss in the shocking killing of UnitedHealthcare CEO Brian Thompson, which abruptly ended the company's investor day in December. The attack subsequently unleashed public fury against the healthcare giant, which faced mounting frustrations that patients faced with the industrywide claim-denial system — and Thompson's killer was sadly celebrated by some as a result. The company was slow to respond to the public reactions, and other insurers refrained from defending the claim-denial practice publicly, for fear of being the next target of a violent attack. These incidents throughout the year compounded the financial pain felt by insurers from elevated costs in the Medicare Advantage market. UnitedHealth has particularly struggled as it gained a greater share of the market. UnitedHealth is the largest player in the market, with 29% of enrollees in 2024, according to KFF data. That's why the increased utilization of health services means it is paying out more to cover those services, which in turn impacts the company's revenue and profit for the year. This is also because the company gets hit twice by the increased utilization, both in its insurance business and the Optum Health business, to support the cost of seeing more, generally sicker patients. When UnitedHealth missed Wall Street's estimates in its first quarter earnings report in April, but the rest of the industry didn't follow, it singled out the healthcare giant for poor management and underestimating its pricing for the second year in a row. UnitedHealth first estimated $10 billion less in revenue for the year based on the higher costs. But it could be a steeper loss than that for the year. Medicare has adjusted prices higher for the 2026 plan year, so the company has an opportunity to regain its footing in how it prices and designs its MA plans. That's something investors are watching. That is a key reason behind what came most recently as a shock to the stock: CEO Andrew Witty announced he was stepping down in May, and longtime former CEO and board chair Stephen Hemsley took over. While Hemsley isn't expected to stay long, the return of the man credited with building UHG into the vertically integrated company it is today signaled to investors that the ship needs right-sizing. "I still think they're the best run insurance company and Stephen Hemsley is the right person to fix it (probably only for 1-2 years)," Gabelli Funds portfolio manager Jeff Jonas said in a note to clients Friday. But the CEO shake-up also indicated the toll the past year may have taken on Witty, according to Jason Schloetzer, an associate professor at Georgetown University. "This has a feeling of some weariness on both sides of the table," he told Yahoo Finance, referring to Witty facing his board. "It could certainly be a very weary time to be the public figure in [the] organization," Schloetzer said. Still, it appears investors aren't ready to completely give up on the stock, as evidenced on Monday. A few executives, including Hemsley and CFO John Rex, purchased shares worth up to $30 million, which helped boost the stock 8% in Monday's trading. But that isn't a big enough Band-Aid to cover the hundreds of billions in market cap lost in the past month. "I've been basically saying stay away over the near-term. It's not like I don't want to be bullish or want to like the stock at this price — I mean, it's gotten cut in half over just a couple of months. I just feel like there are too many things going on," Mizuho's Holz told Yahoo Finance. He recently wrote in a note that with such a steep decline, it's possible the stock gets thrown out of the Dow. It's just one of 30 stocks that make up the index, but it was responsible for 88% of the Dow's decline since November 2024. Meanwhile, some analysts, including JPMorgan's Lisa Gill, remain bullish on the company and its ability to recover performance by 2026. Gill has repeatedly said OptumHealth is "UNH's biggest growth driver." But she has dropped her price estimates twice this year so far. In April, after the earnings call, it dropped from $625 per share to $525. On Friday, she lowered it again to $405 per share. That steep decline signals the tough path to recovery for UnitedHealth. "It's going to take years for the stock to earn back any sort of premium P/E [price-to-earnings] multiple in the market," Gabelli's Jonas said in his note last week. "Clearly investor confidence is shattered right now." Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-05-2025
- Business
- Yahoo
UnitedHealth surging: Why this strategist says 'stay away'
UnitedHealth (UNH) stock is surging after its CEO bought $25 million in stock, even as the company faces legal and leadership challenges. Mizuho Americas healthcare equity strategist Jared Holz joins Market Domination with Josh Lipton and Julie Hyman to explain why he's telling clients to stay away from the stock for now. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
15-05-2025
- Business
- CNBC
Mizuho's Jared Holz: Staying away from UNH is best in near-term after reports of criminal probe
Jared Holz, Mizuho Health Care equity strategist, joins CNBC's 'Squawk on the Street' to discuss outlooks on UNH following reports that the company is facing a criminal probe from the DOJ over alleged Medicare fraud.
Business Mayor
30-04-2025
- Business
- Business Mayor
Pfizer's Irish staff worry about more job losses as drugmaker announces another €1.5bn in cuts
Irish staff of drug giant Pfizer are waiting to hear whether another round of cost-cutting, announced on Tuesday, will mean more job losses at the group's Irish operations. Pfizer said it will cut another $1.7 billion (€1.5 billion) in costs by the end of 2027. This is the third round of cuts announced by the US pharma group in the last three years and brings to $7.7 billion the amount it hopes to save in annual costs. The company said it expected to make additional savings of $1.2 billion by increased use of automation, artificial intelligence and other digital tools. A further $500 million in savings will come from its research and development budget. The new cuts come as the drugmaker struggles to find sources of growth amid declining demand for its vaccine and treatment for Covid-19. Pfizer is expected to lose more than $15 billion in revenue by the end of the decade as top products lose patent protection. A series of multibillion-dollar acquisitions has yet to yield new blockbusters and Pfizer's stable of drugs in development has failed to convince Wall Street, with the company most recently pulling the plug on an experimental pill for obesity. 'Investors are just not excited about the current Pfizer business or the pipeline,' said Mizuho analyst Jared Holz. 'You could argue that nothing that they've done over the past few years has really worked, and to just watch your stock make new multiyear lows, that can't be the endgame here.' The company, which employs some 5,000 people in Ireland, announced last October that it was cutting about 5 per cent of its Irish workforce, with about 210 jobs going across three sites: Grange Castle, West Dublin; Newbridge, Co Kildare; and Ringaskiddy, Co Cork. Read More Attribution Will Make or Break Retail Media It also shed 100 staff from its Newbridge site in late 2023 in response to a global collapse in sales of its Paxlovid Covid antiviral medicine. It is unclear whether the latest cost savings plan with its emphasis on automation will mean further job losses in Ireland. The announcement came alongside publication of the drugmaker's first quarter results, with revenue of $13.7 billion falling short of analysts' $14 billion average estimate. Adjusted earnings were 92 US cents per share. Pfizer is maintaining its 2025 outlook of between $61 billion and $64 billion and adjusted per-share earnings of $2.80 a share to $3 a share. Chief financial officer David Denton said the company is 'trending towards the upper end' of the per-share earnings guidance range. That wasn't enough to encourage investors initially with Pfizer's shares slipping as much as 2.6 per cent after the markets opened in New York. But sentiment improved as the results were digested with the shares trading up 3.4 per cent in early afternoon trade. Mr Denton told analysts on Tuesday that the company is forecasting $150 million in costs this year from the tariffs implemented to date. He said the sum was factored into the company's sales and earnings outlook for the year. Pfizer, which relies on a global network of manufacturing sites to supply drugs to the US, could be significantly affected by Trump's promised tariffs on pharmaceuticals. Chief executive Albert Bourla has said the company could mitigate part of the impact by moving some overseas production into the US. Read More Bord Gáis Energy announces fresh price cuts of up to 10% He said the industry is hoping the Trump administration will focus more on generic medicines like those the World Health Organisation has designated as essential, which tend to be produced mostly in China and India. 'I think that's where the problem is. It's not if an obesity drug is made in Ireland,' he said. Speaking on a conference call with investors, he said the drugmaker's story over the next three years would not be one of strong revenue growth, given looming patent expirations on top products, but rather one of earnings growth. The company's Covid business, which once drove annual revenue to $100 billion, has dramatically faded since the heights of the pandemic. In the first quarter, Covid sales overall dragged on sales. Pfizer's Covid vaccine revenue was $565 million, beating estimates of $325 million. But Paxlovid, the company's pill for Covid, brought in $491 million, far below Wall Street's $902 million forecast. As for other drugs, sales of Eliquis, the company's decade-old blood thinner and one of its top drugs, were $1.92 billion, roughly in line with estimates. The pneumonia vaccine Prevnar added $1.66 billion, meeting analysts' average view. Sales of the heart drug Vyndaqel were $1.49 billion on the quarter, beating estimates of $1.38 billion despite mounting competition from BridgeBio Pharma and Alnylam Pharmaceuticals. – Additional reporting: Bloomberg
