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10-K – 2026-02-20 – mrna-20251231.htm
We may be unable to maintain our product liability insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If the costs of maintaining adequate insurance coverage increase significantly in the future, our operating results could be materially adversely affected. Likewise, if insurance coverage became unavailable to us or economically impractical, we would be required to operate our business without indemnity from commercial insurance providers. 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. If we operate our business with inadequate insurance, we could be responsible for paying claims or judgments against us, which could adversely affect our results of operations or financial condition.
Federal legislation and actions by federal, state and local governments may permit reimportation into the United States of drugs from foreign countries where the drugs are sold at lower prices.
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We may face competition in the United States from medicines sourced from foreign countries with price controls on pharmaceutical products. For example, in October 2020, the FDA published a final rule that would allow for the importation of certain prescription drugs from Canada, where there are government price controls. In January 2024, the FDA approved Florida’s request to import certain lower-priced medications from Canada. While the full implications of the final rule are unknown, legislation or regulations allowing the reimportation of drugs could decrease the price we receive for our products and adversely affect our future revenues and potential profitability.
Healthcare legislative reform discourse and potential or enacted measures may have a material adverse impact on our business and results of operations and legislative or political discussions surrounding the desire for and implementation of pricing reforms may adversely impact our business.
In the United States, federal and state legislatures, health agencies and third-party payors continue to focus on containing the cost of health care. Legislative and regulatory proposals, enactments to reform health care insurance programs and increasing pressure from social sources could significantly influence how our products are prescribed and purchased. For example, provisions of the ACA resulted in changes in the way health care is paid for by governmental and private insurers, including increased rebates owed by manufacturers under the Medicaid Drug Rebate Program, annual fees and taxes on manufacturers of certain branded prescription drugs, the requirement that manufacturers participate in a discount program for certain outpatient drugs under Medicare Part D and the expansion of the number of hospitals eligible for discounts under Section 340B of the PHSA. Additionally, the Inflation Reduction Act of 2022 includes provisions, such as drug pricing controls and Medicare redesign, that have begun to be implemented and are likely to impact our business, but its ultimate effect on our business and the healthcare industry in general is not yet known. See “Business—Government Regulation-Current and future healthcare reform legislation.”
We may face uncertainties due to efforts to repeal, substantially modify or invalidate some or all of the provisions of the ACA. There is no assurance that the ACA, as currently enacted or as amended in the future, will not adversely affect our business and financial results, and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform will affect our business.
There is increasing public attention on the costs of prescription drugs and there have been, and are expected to continue to be, legislative proposals to address prescription drug pricing, which could have significant effects on our business. These actions and the uncertainty about the future of the ACA and healthcare laws may put downward pressure on pharmaceutical pricing and increase our regulatory burdens and operating costs.
In addition, the U.S. government is pursuing measures intended to reduce the cost of drugs in the United States. For example, in May 2025, the President issued an executive order directing the U.S. Department of Health and Human Services and other federal agencies to take certain steps intended to, among other things, reduce the prices of drugs sold in the United States to match the lowest price available for the same drugs in comparably developed nations. It is currently unclear how and to what extent these measures may be implemented and what impact any such implementation would have on us.
There is also significant economic pressure on state budgets that may result in states increasingly seeking to achieve budget savings through mechanisms that limit coverage or payment for drugs or that would allow for importation of pharmaceutical products from lower cost jurisdictions outside the United States. State Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and requiring prior authorization by the state program for use of any drug for which supplemental rebates are not being paid. In addition, changes to federal Medicaid rebate requirements may increase manufacturer rebate liabilities. Government efforts to reduce Medicaid expenses may lead to increased use of managed care organizations by Medicaid programs. This may result in managed care organizations influencing prescription decisions for a larger segment of the population and a corresponding limitation on prices and reimbursement for our products, if approved.
In the EU and some other international markets, the government provides health care at low cost to consumers and regulates pharmaceutical prices, patient eligibility or reimbursement levels to control costs for the government-sponsored health care system. Many countries have announced or implemented measures, and may in the future implement new or additional measures, to reduce health care costs to limit the overall level of government expenditures. These measures vary by country and may include, among other things, patient access restrictions, suspensions on price increases, prospective and possible retroactive price reductions and other recoupments and increased mandatory discounts or rebates, recoveries of past price increases and greater importation of drugs from lower-cost countries. These measures may adversely affect our revenues and results of operations.
We are subject, directly or indirectly, to federal and state healthcare fraud and abuse laws and false claims laws. If we cannot comply, or have not fully complied, with such laws, we could face substantial penalties.
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Healthcare providers, physicians and third-party payors in the United States and elsewhere play a primary role in the recommendation and prescription of pharmaceutical products. 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. In particular, the promotion, sales and marketing of healthcare items and services, as well as a wide range of pricing, discounting, structuring and commissions, certain customer incentive programs and other business arrangements, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices, which may restrict or prohibit such activities and arrangements. Activities subject to these laws also involve the improper use of information obtained during patient recruitment for clinical trials. Se e “Business—Government Regulation—Other healthcare laws.”
The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform. Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible government investigations, is time- and resource-consuming and can divert a company’s attention from the business. If our operations are found to violate any of these laws or any other regulations, we may be subject to significant sanctions, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance. Furthermore, if any physician or other healthcare provider or entity with whom we do business is found to be not in compliance with applicable laws, they may be subject to similar penalties. Any action for violation of these laws, even if successfully defended, could cause us to incur significant legal expenses and divert management’s attention from the operation of the business. In addition, the approval and commercialization of any product candidate we develop outside the United States will subject us to foreign healthcare laws.
The provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is prohibited in the EU and the UK. The provision of benefits or advantages to induce or reward improper performance generally is also governed by the national anti-bribery laws of EU Member States, and the Bribery Act 2010 in the UK. Infringement of these laws could result in substantial fines and imprisonment. The EU Directive (2001/83/EC, as amended) governing medicinal products for human use provides that, where medicinal products are being promoted to persons qualified to prescribe or supply them, no gifts, pecuniary advantages or benefits in kind may be supplied, offered or promised to such persons unless they are inexpensive and relevant to the practice of medicine or pharmacy. This provision has been retained in UK law despite the UK's departure from the EU.
Payments made to physicians in certain EU Member States must be publicly disclosed, and agreements with physicians often are the subject of prior notification and approval by the physician’s employer, competent professional organization or applicable regulatory authorities. Failure to comply with these requirements could result in reputational harm, public reprimands, administrative penalties, fines or imprisonment.
We are subject to various and evolving laws and regulations governing the privacy and security of personal data, and our failure to comply could result in fines or criminal penalties and damage our reputation.
We are subject to data privacy and security laws and regulations in the United States, Europe and other jurisdictions where we operate or collect personal information. These laws and regulations apply to the collection, storage, use, sharing and security of personal data, including health information, and impose significant compliance obligations. In addition, numerous other federal and state laws, including state security breach notification laws, state health information privacy laws and federal and state consumer protection and privacy laws, impose additional requirements with respect to personal information.
The EU GDPR and UK GDPR are wide-ranging in scope and impose numerous requirements on companies that process personal data, including imposing special requirements in respect of the processing of health and other sensitive data, requiring that consent of individuals to whom the personal data relates is obtained in certain circumstances, requiring additional disclosures to individuals regarding data processing activities, requiring that safeguards are implemented to protect the security and confidentiality of personal data, limiting retention periods for personal data, creating mandatory data breach notification requirements in certain circumstances, and requiring that certain measures (including contractual requirements) are put in place when engaging third-party service providers. Different EEA Member States have interpreted the EU GDPR differently and many have imposed additional requirements, adding to the complexity of processing personal data in the EEA. The EU GDPR and UK GDPR also impose strict rules on the transfer of personal data to countries outside the EEA that are not considered to provide “adequate” protection to personal data , including the United States, and permits data protection authorities to impose large penalties for violations. Compliance with the EU GDPR and UK GDPR is a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices. We could be subject to fines and penalties, litigation and reputational harm in connection with any activities falling within the scope of the EU GDPR or UK GDPR.
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In the United States, at the federal level, failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. In addition, numerous states have introduced comprehensive laws which govern the privacy and security of personal information. For example, California has passed the CCPA and more than a dozen other states have passed their own similar comprehensive consumer privacy laws. Other states proposed or passed laws that target particular aspects of privacy, including health, genetic and biometric information, which could have particular impact for our business. For example, Washington passed a law that protects the privacy of consumer health-related information that is not covered by HIPAA and includes a private right of action. In addition, state laws such as the Texas Genomic Privacy Act and others focus specifically on genetic information and could materially impact our business.
Regulators and legislators are also increasingly scrutinizing and restricting certain personal data transfers and transactions involving foreign countries. For example, the Department of Justice’s January 8, 2025, rule on “Preventing Access to U.S. Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons,” prohibits data brokerage transactions involving certain sensitive personal data categories, including health data, genetic data, and biospecimens, to countries of concern, including China. The regulations also restrict certain investment agreements, employment agreements and vendor agreements involving such data and countries of concern, absent specified cybersecurity controls. Actual or alleged violations of these rules may be punishable by criminal and/or civil sanctions, result in exclusion from participation in federal and state programs or restrict our ability to use certain vendors, sites, investigators, or service providers in global clinical trials.
Additionally, many foreign jurisdictions have passed or are considering various proposals for data privacy and protection laws, and data privacy remains an evolving landscape at the domestic and international levels, subject to continued legal challenges. We must devote significant resources to understanding and complying with the changing landscape in this area. Each law is also subject to various interpretations by courts and regulatory agencies, creating additional uncertainty, and any failure or perceived failure to comply with the evolving data protection laws could expose us to risk of enforcement actions taken by authorities, private rights of action in some jurisdictions and potential significant penalties, including criminal sanctions, if we are found to be non-compliant. For example, we could be subject to penalties, including criminal penalties, if we knowingly obtain or disclose individually identifiable health information from a HIPAA-covered health care provider or research institution that has not complied with HIPAA’s requirements for disclosing such information. Furthermore, the number of government investigations related to data security incidents and privacy violations continues to increase and government investigations typically require significant resources and generate negative publicity, which could harm our business and our reputation.
The Clinical Trials Regulation (EU) No. 536/2014 (the Clinical Trials Regulation) and the EMA policy on publication of clinical data for medicinal products for human use provide for the publication of certain clinical information submitted in marketing authorization applications (MAAs). The ability of third parties to review or analyze data from our clinical trials may increase the risk of commercial confidentiality breaches and result in enhanced scrutiny of our clinical trial results. Such scrutiny could result in public misconceptions regarding our drugs and drug candidates. These publications could also result in the disclosure of information to our competitors that we might otherwise deem confidential, which could harm our business.
Our use of generative AI ("GenAI") and other AI technologies presents certain risks and challenges given the emerging nature of AI technologies.
The development and use of GenAI and other AI technologies (collectively, AI Technologies), together with an uncertain and rapidly evolving global regulatory landscape, pose risks that could harm our reputation, expose us to liability, increase compliance costs, or otherwise adversely affect our business. In particular, new and emerging regulations, such as the European Union Artificial Intelligence Act (the EU AI Act), impose or are expected to impose enhanced obligations related to the development, deployment, transparency, governance, risk management, and use of certain AI systems, including those classified as high-risk, and may subject us to significant fines, penalties, operational restrictions, or changes to our business practices if we fail to comply. These requirements may apply extraterritorially, including to AI systems developed or deployed outside the European Union if their outputs are used in the EU.
In the United States, over the past year, states have advanced, and in some cases passed, dozens of laws focusing on AI and GenAI governance and regulation, including on deployment of AI Technologies in healthcare settings. At the same time, the Trump Administration has endorsed a federal moratorium on the enforcement of state AI laws, including through an executive order on “Ensuring a National Policy Framework for Artificial Intelligence.” So far, these efforts have not been successful at curtailing state action on AI regulation, contributing to a complicated legislative patchwork, which may be litigated in state and federal courts. Moreover, the FDA has advanced guidance and proposed frameworks for regulating AI Technologies in drug discovery, marketing submissions, and medical device development.
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The integration of AI Technologies into our and our vendors’ systems (potentially without the vendor disclosing such use to us) subjects us to the risk that the providers of AI Technologies may not meet existing or evolving legal, regulatory or industry standards relating to privacy, data protection, cybersecurity, intellectual property, product safety, human oversight, or algorithmic accountability. Compliance with these requirements may require substantial investments in governance, documentation, monitoring, testing, or operational controls, and may limit our ability to deploy or scale certain AI-enabled tools or features.
In addition, bad actors globally use increasingly sophisticated methods, including AI Technologies, to engage in illegal activities involving the theft and misuse of personal information, confidential information and intellectual property. The use of GenAI models in our internal or third-party systems may create new attack surfaces or methods for adversaries, which could impact us and our vendors. These factors may lead to breaches of security or privacy, reduced system performance or availability, loss of intellectual property, unauthorized disclosure of confidential or proprietary information. Sophisticated cyber-attacks, including those leveraging AI, could exacerbate these risks.
Further, GenAI’s potential for producing false, misleading or biased outputs, or to generate content that may not be subject to IP protection or that may infringe the proprietary rights of third parties, poses additional risks to our business. Regulatory changes or reinterpretations could introduce new compliance risks, including potential government enforcement actions or civil lawsuits. Our competitors’ faster or more effective adoption of AI could also disadvantage us.
We could be adversely affected by outbreaks of epidemic, pandemic or other contagious diseases.
I n the event of a future epidemic or pandemic, our clinical trials could be paused or delayed due to restrictions (such as quarantines or travel limitations) or re prioritization of resources . T ravel limitations could also create challenges and potential delays in our development and production activities, increasing the expense and timelines for producing our products and product candidates.
We utilize third parties to, among other things, manufacture raw materials, components, parts and consumables, perform quality testing and ship our products. If these third parties were to experience delays or disruptions in providing their services in response to an epidemic or pandemic, our supply chain could be disrupted, limiting our ability to manufacture and sell our products and manufacture product candidates for our clinical trials, as well as negatively impacting our research and development operations. Such delays or disruptions could adversely impact our strategic collaborators’ ability to fulfill their obligations, which could affect the clinical development or regulatory approvals of product candidates under joint development.
In addition, during a global health crisis, one or more government entities could take actions (such as via the Defense Production Act in the U.S.) that diminish our rights or economic opportunities with respect to our products. Our third-party service providers could be impacted by government-imposed restrictions on services they might otherwise offer. 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 shareholders and cause us to incur debt or assume contingent liabilities.
We may engage in acquisitions, joint ventures and collaborations, including licensing or acquiring complementary products, IP rights, technologies or businesses. Such transactions and relationships may entail numerous risks, including:
• increased operating expenses and cash requirements;
• assimilation of operations, IP and products, including difficulties associated with integrating new personnel;
• the diversion of management’s attention from our existing product programs and initiatives;
• the loss of key personnel and uncertainties in our ability to maintain key business relationships;
• risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; and
• our inability to generate revenue from acquired technology or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
If we undertake acquisitions in the future, we may utilize cash, issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense. Moreover, if we cannot locate suitable acquisition or strategic collaboration opportunities, our ability to grow or obtain access to technology or products that may be important to the development of our business may be impaired.
The illegal distribution and sale by third parties of counterfeit or stolen versions of mRNA products could negatively impact our financial performance or reputation.
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Third parties could illegally distribute and sell, especially online, counterfeit versions of mRNA products that do not meet the rigorous cGMP manufacturing and testing standards. Counterfeit medicines may contain harmful substances or the wrong dose, are frequently unsafe or ineffective and could be life-threatening. However, to distributors and users, counterfeit products may be visually indistinguishable from the authentic version.
Reports of adverse reactions to counterfeit products, increased levels of counterfeiting or unsafe mRNA products could materially affect patient confidence in our mRNA products. Adverse events caused by unsafe counterfeit or other non-mRNA products could mistakenly be attributed to our mRNA products. In addition, thefts of inventory at warehouses, plants or while in-transit, which are not properly stored and which are sold through unauthorized channels, could adversely impact patient safety, our reputation and our business. The public could lose confidence in the integrity of mRNA products because of counterfeiting, theft or improper manufacturing processes.
Climate change or legal, regulatory or market measures to address climate change may negatively affect our business, results of operations and financial condition.
We are exposed to physical risks (such as rising temperatures, flooding and severe storms), risks in transitioning to a low-carbon economy (such as additional legal or regulatory requirements, changes in customer behavior and cost and availability of raw materials) and social and human effects (such as population dislocations and harm to health and well-being) associated with climate change. These risks can be either acute (short-term) or chronic (long-term). Climate-related physical risks to our facilities and those of our suppliers could disrupt our operations and supply chain, which may result in increased costs.
New legal or regulatory requirements may be enacted to prevent, mitigate or adapt to the implications of climate change and its effects on the environment. These regulations, which may differ across jurisdictions, could subject us to new or expanded carbon pricing or taxes, increased compliance costs, restrictions on greenhouse gas emissions, investment in new technologies, increased carbon disclosure and transparency, investments in data gathering and reporting systems, upgrades of facilities to meet new building codes and the redesign of utility systems, which could increase our operating costs, including the cost of electricity and energy. Our supply chain would likely be subject to these same transitional risks and would likely pass along any increased costs to us, which may affect our procurement of raw materials or other supplies required to operate our business at the quantities and levels we require.
Evolving environmental, social and governance (ESG) standards and expectations may expose us to numerous risks.
Many investors use ESG screening criteria to determine whether we qualify for inclusion in their investment portfolios, and such investors and other stakeholders expect us to set ESG goals and provide robust disclosure regarding such goals, progress toward goals and other ESG matters of interest. Potential changes in voting practices and the fragmented influence of proxy advisors may impact investor expectations. In addition, we also face ESG-related expectations from certain customers outside the U.S. that can impact our competitiveness in commercial tenders. In response, we have established ESG goals and adapted our tracking and reporting to various ESG frameworks; however, these goals reflect our current plans and aspirations and may not be achieved.
ESG reporting standards are relatively new, have not been harmonized and continue to evolve, and differing interpretations, changing frameworks and evolving regulatory expectations could make compliance more complex and result in inconsistent or revised disclosures over time. If our ESG practices, disclosures or progress do not meet evolving stakeholder or regulatory expectations, or if we fail or are perceived to fail to achieve or accurately report progress toward our goals, our reputation, ability to attract and retain employees and attractiveness as an investment or business partner could be adversely affected, and we could be subject to enforcement actions or litigation. Additionally, the increased focus on ESG matters by policymakers, regulators and investors has in some instances resulted in diverging expectations and standards, which could make it more difficult to comply with ESG-related regulations across our global business.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous and flammable materials and wastes, including chemicals and biological materials. We generally contract with third parties for the disposal of these materials and waste products, and we cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from any use by us of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines, penalties or other sanctions for failure to comply with such laws and regulations. We may also incur substantial costs to comply with such laws and regulations, and these laws and regulations could impair our research, development or production efforts.
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Our workers’ compensation insurance may not provide adequate coverage against potential liabilities due to injuries to our employees resulting from the use of hazardous materials. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials.
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. Since our IPO in December 2018, o ur stock price has ranged from a high of $497.49 to a low of $11.54 per share. Over the last several years, our stock has experienced pronounced and extended periods of volatility, which could cause our shareholders to incur substantial losses. Public statements by us, government agencies, the media, competitors, financial analysts or others have resulted, and may result, in significant fluctuations in our stock price. Public information, regardless of accuracy, has had and will likely continue to have an outsized impact on our stock price.
The stock market generally, and the biopharmaceutical sector in particular, has experienced significant volatility that may be unrelated to company operating performance, and you may be unable to sell your shares at or above your initial purchase price. Our stock price may be influenced by many factors, including:
• our product sales and anticipated product revenue;
• our ability to effectively reduce costs;
• the commercial launch of any additional products;
• timing and results of clinical trials or progress of our product candidates or those of our competitors;
• the exclusion or removal of our stock from market indices;
• the success of competitive products or technologies;
• the emergence or decline of new or existing variants of the SARS-CoV-2 virus;
• developments regarding our manufacturing, regulatory and commercialization efforts, or information regarding such efforts by competitors;
• regulatory or legal developments in the United States and other countries;
• developments or disputes concerning patent applications, issued patents or other proprietary rights;
• the recruitment or departure of key personnel;
• expenses related to any of our products or clinical development programs;
• the results of our efforts to discover, develop, acquire or in-license additional product candidates;
• actual or anticipated changes in estimates of financial results, development timelines or recommendations by securities analysts;
• variations in our financial results or those of companies that are perceived to be similar to us;
• changes in the structure of healthcare payment systems;
• economic, industry and market conditions generally, and in the biopharmaceutical sector specifically; and
• announcement by us or our competitors of the commencement or termination of significant acquisitions, strategic collaborations, joint ventures or capital commitments.
Securities class-action litigation often has been instituted against companies following periods of volatility in their stock price. In 2024, class action and derivative litigations were filed against us related to statements made about our RSV vaccine. See Item 3. “Legal Proceedings.” We could incur substantial costs in defense of such litigation or any future lawsuits that may be filed against us, and management’s attention and resources could be diverted.
Our principal shareholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to shareholder approval.
As of February 13, 2026, our executive officers, directors and affiliated shareholders owned, directly or indirectly, approximately 8% of our outstanding common stock. In addition, non-affiliated five percent or greater shareholders owned approximately 32% of our outstanding common stock. These shareholders have the ability to influence us through their ownership positions. For example, if t hey were to act together, they could exert significant influence over matters such as elections of directors, amendments of our organizational documents or approval of any merger, sale of assets or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that our shareholders may believe to be in their best interests.
Provisions in our organizational documents and 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.
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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. Our charter and by-laws include provisions that:
• authorize “blank check” preferred stock, which could be authorized for issuance by our board of directors without shareholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;
• create a classified board of directors whose members serve staggered three-year terms;
• limit shareholders’ ability to call a special meeting of shareholders to shareholders representing at least 20% of our outstanding shares;
• prohibit shareholder action by written consent;
• establish an advance notice procedure for shareholder approvals to be brought before an annual meeting of our shareholders, including proposed nominations of persons for election to our board of directors;
• provide that our directors may be removed only for cause;
• provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;
• specify that no shareholder is permitted to cumulate votes at any election of directors;
• expressly authorize our board of directors to modify, alter or repeal our by-laws; and
• require supermajority votes of the holders of our common stock to amend specified provisions of our charter and by-laws.
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. Any provision of our charter, by-laws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our shareholders to receive a premium for their shares, and could also affect the price that some investors are willing to pay for our common stock.
We do not expect to pay cash dividends for the foreseeable future.
We do not currently intend to declare or pay cash dividends on our capital stock and instead intend to retain any future earnings to finance the growth and development of our business or to return cash to shareholders through share repurchases. In addition, our existing credit agreement contains restrictions on our ability to pay dividends, and any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.
Our by-laws designate the Court of Chancery of the State of Delaware or the U.S. District Court for the District of Massachusetts as the exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.
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). 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). Our by-laws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision.
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. Additionally, the forum selection clauses in our by-laws may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our shareholders. 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. District Court for the District of Massachusetts may also reach different judgments or results than would other courts, including courts where a shareholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our shareholders.
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General risk factors
Our employees, principal investigators and consultants may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
We are exposed to the risk of fraud or other misconduct by our employees, principal investigators leading our clinical trials and consultants. Such misconduct could include failures to comply with FDA regulations or similar regulations in other jurisdictions, provide accurate information to the FDA, the EMA and other regulatory authorities, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, comply with industry codes of conduct, report financial information or data accurately, or disclose unauthorized activities to us. Such misconduct also could involve improper use of information obtained during clinical trials or interactions with the FDA or other regulatory authorities, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter employee misconduct, and we may fail to control unknown or unmanaged risks or losses or take steps that protect us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, those actions could have a significant impact on our business, financial condition, results of operations and prospects, including through the imposition of significant fines or other sanctions.
We could face unfavorable U.S. or global economic conditions, including as a result of disease outbreak, war, conflict or other political instability, or geopolitical risks .
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. Adverse macroeconomic conditions, and perceptions or expectations about current or future conditions, such as inflation, slowing growth, rising interest rates, the imposition of tariffs (either on imports or exports, which may impact us directly or indirectly through increased costs in our supply chain), rising unemployment and recession, could negatively affect our business and financial condition. Additionally, global events, including war, conflict, political instability or other adverse economic conditions have and may in the future cause governments to divert spending away from healthcare, negatively impacting the market for our products.
Any severe or prolonged economic downturn could create a variety of risks to our business, including weakened demand for our medicines, and negatively impact our ability to raise additional capital or financing if needed on favorable terms, if at all. A weak or declining economy could strain our suppliers, possibly resulting in supply disruption, or cause delays in payments for our services by third-party payors or our collaborators. Any of the foregoing could harm our business and we cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business.
Additionally, geopolitical tensions could adversely impact our business and our commercial plans. For instance, restrictions by the U.S. government on the export of mRNA technology or our products to certain markets, or restrictions on the establishment of manufacturing in certain foreign jurisdictions, may prevent us from seeking commercial growth opportunities in a manner that harms our competitive position.
Changes in tariffs and other governmental trade policies could negatively affect our business and results of operations.
Recent governmental actions and proposals relating to tariffs and other trade policies have created uncertainty about future trading arrangements and the possibility of imposing or increasing tariffs on certain goods. For example, certain governments (including the U.S. and other countries where we do business) have imposed or may impose tariffs on a wide range of products, raw materials, and intermediate goods. Additional tariffs, or retaliatory measures by other countries in response, may be implemented at any time. Should these or similar tariffs remain in place (or be re-imposed or increased), or if additional tariffs or trade restrictions are enacted in the future, they could cause us or our customers to face higher supply costs, delays or a need to switch suppliers. These actions could adversely affect our margins, profitability, financial condition, and results of operations. While we have not experienced adverse impacts of tariffs to date, we cannot predict future changes in trade policy or the terms of any renegotiated trade agreements, nor can we determine the impact they may have on our business. Any such changes could have a material adverse effect on our business, financial condition, and results of operations.
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Employee litigation and unfavorable publicity could negatively affect our future business.
Our employees may, from time to time, bring lawsuits against us regarding injury, creating a hostile workplace, discrimination, wage and hour disputes, sexual harassment or other employment issues. Recently, there has been an increase in the number of discrimination and harassment claims generally. Coupled with the expansion of social media platforms and similar devices that allow individuals access to a broad audience, these claims have had a significant negative impact on some businesses. Certain companies that have faced employment- or harassment-related lawsuits have had to terminate management or other key personnel, and have suffered reputational harm.
Ineffective internal controls could adversely impact our business and operating results.
Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, failure or interruption of information technology systems, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and we could fail to meet our financial reporting obligations.
Inadequate funding for the FDA, CDC and other government agencies, including from government shut downs, or other disruptions to these agencies’ operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely .
The FDA’s ability to review and approve new products can be affected by a variety of factors, including government priorities, budget and funding levels, the ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes. Average FDA review times have fluctuated in recent years as a result. In addition, funding of other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA, CDC and other agencies may delay the review or approval of new product candidates, or the development of usage recommendations. If a prolonged government shutdown occurred, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions.
Changes in tax law could adversely affect our business and financial condition.
We are subject to evolving and complex tax laws in the jurisdictions in which we operate. The rules dealing with U.S. federal, state, local and non-U.S. income taxation are constantly under review by legislative and tax authorities. Changes to tax laws (which could apply retroactively) could adversely affect us and our shareholders. 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.
Social media is increasingly being used to communicate about our research, product candidates, commercial products and the diseases our products and product candidates are designed to treat. Social media practices in the biopharmaceutical industry continue to evolve and regulations relating to such use are not always clear. This uncertainty creates risk of noncompliance with regulations applicable to our business, resulting in potential regulatory actions against us. For example, subjects may use social media channels to comment on their experience in an ongoing blinded clinical trial or to report an alleged adverse event. When such disclosures occur, we may fail to monitor and comply with applicable adverse event reporting obligations or we may be unable to defend our business in the face of political and market pressures generated by social media due to restrictions on what we may say about our product candidates. There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website. If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions or incur other harm to our business.
Item 1B. Unresolved Staff Comments
None.
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Item 1C. Cybersecurity
Cyber Risk Management and Strategy
Our cybersecurity organization’s mission is to provide a targeted set of services, support and capabilities to reduce the risk of cyberattacks, rapidly detect and contain threats, and mitigate risks to critical data.
Recognizing the threat of security breaches and cyberattacks globally, we have developed a cybersecurity program, overseen by our Chief Technology and 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 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.
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. We have a process in place for notification to our leadership response team in the event of a significant cyber incident, and for escalation of these events to our Audit Committee and Board, as appropriate . To date, we have not experienced a cybersecurity incident that has had a material impact on our business strategy, results of operations, or financial condition .
We undergo several annual internal compliance audits and external reviews to evaluate our controls, including cybersecurity controls. In an effort to minimize third-party risk, we have established a process to assess the security practices of third-party suppliers and related risks, including through review of relevant supplier certifications and security and responses to standardized information gathering (SIG) questionnaires, as applicable and appropriate.
Governance Related to Cybersecurity Risks
Our Board of Directors oversees Moderna’s overall risk management strategy. The Board exercises oversight of risks from cybersecurity threats primarily through its Audit Committee, which oversees our risk management processes for information security and technology risks. Our cybersecurity risk management processes are integrated into our overall risk management strategy, which is overseen by the Audit Committee. At least annually, the Audit Committee discusses our risk management program, including information security and technology risks and findings from any audits, with our internal audit staff.
The Audit Committee receives cyber-related updates from management, including our CISO at committee meetings. During meetings, our CISO updates the committee on Moderna’s cybersecurity posture, potential threats and risk mitigation strategies, and the progress of the Company’s cybersecurity initiatives, as appropriate. The Chair of the Audit Committee and management provide regular briefings on such matters to the full Board of Directors , as appropriate.
At the management level, our CISO is primarily responsible for leading our cybersecurity strategy for assessing and managing material risks from cybersecurity threats. Our current CISO has over 25 years of cybersecurity experience across a wide array of industries, most recently serving in leadership positions at two different public companies and previous roles of increasing responsibility at multinational technology companies. 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.
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. We also maintain relationships with law enforcement and industry groups to support our cybersecurity intelligence and risk management efforts.
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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, and is the location of our corporate headquarters and platform, drug discovery, and clinical development activities. The lease has a term of 15 years, with options for us to extend the lease for up to two additional seven-year terms.
The 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 722,000 square feet and 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. 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 underwent enhancements, including the addition of 60,000 square feet to the existing structure. The facility includes state-of-the-art mRNA manufacturing areas, including a full manufacturing clean room, quality control laboratories, and a just-in-time satellite warehouse. The Marlborough facility became operational in August 2025 and is intended to support our intismeran autogene program.
In September 2024, we completed construction of our mRNA manufacturing facility in Laval, Quebec, Canada, which we own, and the facility received a Drug Establishment License from Health Canada authorizing the production of mRNA vaccine drug substance. The facility encompasses approximately 100,000 square feet of manufacturing space and has the capacity to produce up to 100 million doses annually. In 2025, the facility began manufacturing drug substance for our Spikevax, supporting domestic mRNA vaccine production for Canada. In December 2025, Health Canada approved the addition of the Laval drug substance site for mRESVIA production, representing the second product approval for the Canadian supply chain.
We own a large-scale mRNA manufacturing facility, the Moderna Technology Centre – Melbourne (MTC-M), located in Clayton, Victoria, Australia, within Monash University’s Technology Precinct. The facility encompasses approximately 130,000 square feet of manufacturing space and is designed to support end-to-end mRNA vaccine manufacturing, with the capacity to produce up to 100 million doses annually. In August 2025, the facility received full Good Manufacturing Practice (GMP) licensing, authorizing the manufacture of mRNA vaccine drug substance and finished drug product in compliance with applicable regulatory standards.
We own the Moderna Innovation and Technology Centre (MITC), a manufacturing and research facility located at the Harwell Science and Innovation Campus in Oxfordshire, United Kingdom. The facility, which officially opened in September 2025, encompasses approximately 100,000 square feet and is designed to support mRNA vaccine manufacturing and related research activities. The MITC has the capacity to produce up to 100 million doses annually and up to approximately 250 million doses in the event of a pandemic. The facility is intended to produce British-made mRNA respiratory vaccines to support the National Health Service (NHS) seasonal vaccination programs and also supports research into the application of mRNA technology in additional disease areas.
We also own and lease various parcels of land, office and lab spaces across the globe for our business operations.
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. For a description of risks relating to these and other legal proceedings we face, see Part I, Item 1A, “Risk Factors,” including the discussion under the headings entitled “Risks related to our intellectual property” and “Risks related to the manufacturing of our commercial products and product candidates.”
The outcome of any such proceedings, regardless of the merits, is inherently uncertain; therefore, assessing the likelihood of loss and any estimated damages is difficult and subject to considerable judgment. We describe below those legal matters for which a material loss is either (i) possible but not probable, and/or (ii) not reasonably estimable at this time.
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Pfizer/BioNTech Patent Litigation
U.S. Proceedings
In August 2022, we filed a lawsuit in the U.S. District Court for the District of Massachusetts against Pfizer Inc. (Pfizer) and BioNTech SE, BioNTech Manufacturing GmbH and BioNTech US Inc. (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. The case has been stayed pending the outcome of two Inter Partes Review proceedings (IPRs) 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 March 2025, the PTAB found the patents invalid and we appealed to the U.S. Court of Appeals for the Federal Circuit (Federal Circuit).
European Proceedings
Also in August 2022, we initiated patent infringement proceedings in the UK (in the High Court of Justice of England & Wales), the Netherlands (in the District Court of The Hague) and Germany (in the Dusseldorf Regional Court), 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. In May 2023, we initiated patent infringement proceedings in Ireland (in the High Court) and Belgium (in the Brussels Business Court) against Pfizer, BioNTech and related entities with respect to the same European patents. As in the U.S. action, we seek a judgment of infringement of the asserted patents and monetary damages.
In July 2024, the High Court of Justice of England & Wales ruled that EP3590949 (the ‘949 patent), which relates to chemically-modified mRNA, was valid and infringed by Pfizer and BioNTech. The court further ruled that EP3718565 (the ‘565 patent), which relates to coronavirus mRNA vaccines, was invalid. In August 2025, the UK Court of Appeal upheld the High Court’s decision that the ‘949 patent is valid and infringed by Pfizer and BioNTech. In December 2025, the UK Supreme Court denied permission for appeal by Pfizer and BioNTech.
In December 2023, the District Court of The Hague ruled that the ‘949 patent was invalid. We appealed to the Court of Appeal of The Hague, which held a hearing on September 22, 2025, and is expected to issue its decision on March 31, 2026.
In March 2025, the Dusseldorf Regional Court in Germany ruled that Pfizer and BioNTech infringed the ‘949 patent. Pfizer and BioNTech have appealed to the Higher Regional Court of Dusseldorf, which will hold a hearing November 26, 2026.
Pfizer Inc. and BioNTech SE have filed oppositions seeking revocation of the ‘949 and ‘565 patents at the European Patent Office. In May 2024, the Opposition Division (OD) ruled that the ‘949 patent was valid, and Pfizer and BioNTech appealed to the Technical Appeal Board (TBA), which will hold a hearing on September 8-10, 2026. In November 2023, the OD ruled that the ‘565 patent was invalid and we appealed to the TBA, which confirmed the invalidity on January 27, 2026.
Arbutus Patent Litigation
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 vaccine willfully infringes certain U.S. patents concerning lipid nanoparticles but does not seek to prevent or stop the marketing or sales of our COVID vaccines. The complaint seeks a judgment of infringement of the asserted patents and monetary damages. The Court has set trial to begin March 9, 2026.
In March 2025, Arbutus and Genevant filed five international lawsuits asserting that our manufacture and sale of Spikevax and/or mRESVIA infringes certain patents concerning lipid nanoparticles. The companies filed lawsuits in the Canadian Federal Court, the Tokyo District Court in Japan and the Swiss Federal Patent Court and submitted two lawsuits to the Unified Patent Court (UPC). The UPC actions seek relief in all UPC member states and in ten additional European Patent Convention contracting states. Each proceeding identifies Spikevax and mRESVIA as accused products except for the Canadian proceeding, which only identifies Spikevax. The complaints seek monetary relief and injunctive relief after a trial decision and before any appeals are decided. Hearings for the UPC actions are set for May 19 and 20, 2026. The Canadian lawsuit is scheduled for trial beginning in September 2027.
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GSK Patent Litigation
In October 2024, GlaxoSmithKline Biologicals SA (GSK) filed two separate complaints against us in the U.S. District Court for the District of Delaware asserting that our manufacture and sale of our COVID and RSV vaccines willfully infringe certain U.S. patents directed to lipid-mRNA vaccine formulation technology. Each complaint seeks a judgment of infringement of the asserted patents and unspecified damages, and injunctive relief related to RSV after any appeals are decided. The Court has set trial to begin on July 19, 2027 with respect to our COVID vaccines, and on August 23, 2027 with respect to our RSV vaccine.
In July 2025, GSK submitted two lawsuits to the UPC asserting that our manufacture and sale of our COVID and RSV vaccines infringe three European patents related to liposomes with specified characteristics for RNA delivery. The complaints seek monetary and injunctive relief after appeal. Hearings are set for September 2026.
In December 2025, GSK served us with two separate complaints in the Barcelona Commercial Court and the Madrid Commercial Court (the Spanish Courts) asserting that our manufacture and sale of our COVID and RSV vaccines infringe the same patents asserted in the UPC actions. The complaints seek monetary and injunctive relief after an appeal decision.
Northwestern University Patent Litigation
In October 2024, Northwestern University filed a complaint against us in the U.S. 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.
Alnylam Patent Litigation
In March 2022 and July 2022, Alnylam Pharmaceuticals, Inc. (Alnylam) filed two complaints against us in the U.S. District Court for the District of Delaware asserting that our manufacture and sale of our COVID vaccine infringed 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. In the first case, Alnylam appealed and the Federal Circuit decided the appeal in our favor in June 2025.
Relatedly, 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 complaint sought judgments of infringement of the asserted patents and monetary damages. 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.
Following the June 2025 Federal Circuit decision in our favor, we and Alnylam entered into an agreement in September 2025 to settle all disputes between the parties, including filing a stipulated dismissal of Alnylam’s claims with prejudice. The settlement did not include payments of any kind by us.
Bayer CropSciences Patent Litigation
In January 2026, Bayer CropScience LLC, Monsanto Company and Monsanto Technology, LLC (collectively, Bayer) 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 vaccines infringe a U.S. patent directed to methods of modifying gene sequences. The complaint seeks a judgment of infringement of the asserted patent and unspecified damages.
mNG Bio Patent Litigation
In January 2026, mNG Bio, LLC (mNG) filed a complaint against us in the U.S. District Court for the District of Massachusetts asserting that certain tests of our COVID vaccines willfully infringe a U.S. patent directed to a yellow-green fluorescent protein. The complaint seeks a judgment of infringement of the asserted patent and unspecified damages.
BioNTech Patent Litigation
In February 2026, BioNTech SE filed a complaint against us in the U.S. District Court for the District of Delaware asserting that our manufacture and sale of mNEXSPIKE willfully infringes a U.S. patent directed to modified mRNA compositions encoding a spike protein fragment. The complaint seeks a judgment of infringement of the asserted patent and unspecified damages.
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Securities Class Action Litigation
In August 2024, a putative shareholder class action complaint was filed against us and certain officers in the U.S. District Court for the District of Massachusetts. The action was purportedly brought on behalf of a class of shareholders who purchased Moderna common stock between January 18, 2023 and June 25, 2024. The complaint asserts claims under the Securities Exchange Act of 1934 regarding statements about our RSV vaccine (mRNA-1345) and seeks unspecified damages. On August 25, 2025, plaintiff filed an amended complaint, which, among other things, narrowed the asserted class period to February 15, 2024 to May 31, 2024. On October 24, 2025, the Company filed a motion to dismiss, which remains pending.
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 us as a nominal defendant. 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. The cases were stayed pending a decision on defendants’ motion to dismiss the putative securities class action described above.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market for Our Common Stock
Our common stock trades on the Nasdaq Global Select Market under the symbol “MRNA”.
Stock Performance Graph
The following performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of the Exchange Act or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any filing of Moderna, Inc. under the Securities Act or the Exchange Act.
The following graph illustrates a comparison for the five years ended December 31, 2025 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. Such returns are based on historical results and are not intended to suggest future performance.
The comparisons shown in the graph below are based upon historical data. We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock.
Stockholders
We had approximately 62 stockholders of record as of February 13, 2026. 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. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
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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. Any future determination to pay dividends will be made at the discretion of our board of directors and will depend on various factors, including applicable laws, our results of operations, financial condition, future prospects, then applicable contractual restrictions and any other factors deemed relevant by our board of directors. In addition, our Credit Agreement with lenders led by Ares Capital Corporation includes covenants that, subject to certain exceptions, restrict our ability and the ability of our subsidiaries to pay dividends or distributions. Investors 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.
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, 2025, there were no shares repurchased. As of December 31, 2025, $1.7 billion of our Board of Directors’ authorization for repurchases of our common stock remained outstanding, with no expiration date.
See Note 13 to consolidated financial statements for information regarding our share repurchase programs.
Item 6. [Reserved]
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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes and other financial information appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in “Part I, Item 1A - Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a biotechnology company advancing a new class of medicines made of messenger RNA (mRNA). mRNA medicines are designed to direct the body’s cells to produce intracellular, membrane or secreted proteins that have a therapeutic or preventive benefit with the potential to address a broad spectrum of diseases. 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 infectious disease vaccines, oncology therapeutics and rare disease therapeutics.
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. We currently have three commercial products—Spikevax® and mNEXSPIKE®, our COVID vaccines, and mRESVIA®, our vaccine against respiratory syncytial virus (RSV). We also have a diverse development pipeline of 25 development candidates across our 35 development programs currently in clinical studies.
2025 Business Highlights
U.S. Manufacturing Capabilities Expansion
In November 2025, we announced the expansion of our U.S. manufacturing capabilities through the onshoring of drug product manufacturing to our existing Moderna Technology Center in Norwood, Massachusetts. Upon completion, this expansion will enable end-to-end mRNA manufacturing in the United States, supporting both commercial and clinical supply needs. This expansion is part of our continued investment in U.S.-based manufacturing infrastructure to support our mRNA vaccine and therapeutic pipeline. Construction for the new drug product manufacturing capability has commenced, with completion targeted in the first half of 2027.
$1.5 Billion Five-Year Credit Facility
In November 2025, we entered into a five-year term loan facility providing for up to $1.5 billion of capital to enhance our balance sheet and provide increased financial flexibility. The facility includes a $600 million initial term loan funded at closing, a $400 million delayed draw term loan facility available through November 2027, and an additional $500 million delayed draw term loan facility available through November 2028, subject to the achievement of specified regulatory milestones.
Total Revenue and Loss Per Share
For the year ended December 31, 2025, we recognized total revenue of $1.9 billion compared to $3.2 billion and $6.8 billion for the years ended December 31, 2024 and 2023, respectively. Loss per share was $(7.26) for the year ended December 31, 2025, compared to loss per share of $(9.28) and $(12.33) for the years ended December 31, 2024 and 2023, respectively.
Program Developments
Infectious Disease Vaccines
• COVID vaccines: We have received approval in 40 countries for our 2025-2026 formula for Spikevax. We have also received U.S. Food and Drug Administration (FDA) approval of our 2025-2026 formula for mNEXSPIKE, our second COVID vaccine, in all adults aged 65 and older, as well as individuals aged 12 to 64 years with at least one underlying risk factor. mNEXSPIKE is also approved in Europe, Canada and Australia and we have filed and are targeting 2026 approvals in Japan and Taiwan.
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• mRESVIA : Our RSV vaccine has been approved for adults aged 60 years and older in 40 countries. It is also approved in 31 of those countries for individuals 18 to 59 years of age who are at increased risk for disease.
• Seasonal flu vaccine: Our mRNA-1010 regulatory filings are under review in the United States, Europe, Canada and Australia. In February 2026, in response to a prior Refusal-to-File letter, we engaged with the FDA in a Type A meeting and submitted an amended biologics license application (BLA) outlining a revised regulatory pathway based on age, seeking full approval for adults 50 to 64 years of age and accelerated approval for adults 65 and older, along with a post-marketing requirement to conduct an additional study in older adults. Following the meeting and submission of the amended application, the FDA accepted our BLA for review and assigned a Prescription Drug User Fee Act (PDUFA) goal date of August 5, 2026.
• Seasonal flu + COVID vaccine: Our mRNA-1083 regulatory filing is under review in Europe and Canada. We are awaiting further guidance from the FDA on refiling.
• Norovirus vaccine: We recently completed enrollment of a second Northern Hemisphere season (2025-2026) cohort in our ongoing Phase 3 study for our norovirus vaccine candidate (mRNA-1403).
Oncology Therapeutics
• Intismeran autogene: We are advancing intismeran (mRNA-4157), our mRNA-based individualized neoantigen therapy, in collaboration with Merck, with eight total Phase 2 and Phase 3 clinical trials underway across multiple tumor types including melanoma, non-small cell lung cancer (NSCLC), bladder cancer and renal cell carcinoma. In January 2026, we and Merck announced five-year data from the Phase 2b study of intismeran in combination with KEYTRUDA, which demonstrated sustained improvement in recurrence-free survival in patients with high-risk melanoma (stage III/IV) following complete resection.
• mRNA-4359: Our Phase 1/2 study of mRNA-4359, an investigational wholly-owned cancer antigen therapy, is ongoing. The Phase 2 portion of the study includes cohorts in first-line metastatic melanoma, second-line+ metastatic melanoma and first-line metastatic NSCLC, and we expect a potential Phase 2 data readout in 2026.
Rare Disease Therapeutics
• Propionic acidemia (PA) therapeutic: mRNA-3927 is in a registrational study and target enrollment has been reached. In January 2026, we entered into a strategic collaboration with Recordati, an international pharmaceutical group, to advance mRNA-3927 through the final stages of clinical development and, if approved, global commercialization.
• Methylmalonic acidemia (MMA) therapeutic: mRNA-3705 has been selected by the FDA for the Support for Clinical Trials Advancing Rare Disease Therapeutics (START) pilot program, with a registrational study expected to begin in 2026.
Other Business Updates
During the third quarter of 2025, our mRNA manufacturing facilities in Australia and the United Kingdom were licensed and became operational. These facilities were established under long-term strategic agreements with the respective governments to support domestic mRNA manufacturing and pandemic preparedness. The facilities will enable local supply of our mRNA vaccines and provide rapid response capabilities in the event of future public health emergencies.
In September 2025, we delivered the first mRNA vaccines fully manufactured in Canada from our facility in Laval, Quebec, marking a significant milestone in our collaboration with the Government of Canada. The site, which received its Drug Establishment License from Health Canada in 2024, now produces the drug substance for our updated Spikevax targeting the LP.8.1 variant. Fill-and-finish of the vaccine, including the new single-use pre-filled syringes, is completed by Novocol Pharma in Cambridge, Ontario. This milestone demonstrates the execution of our end-to-end manufacturing strategy and our ability to provide timely access to locally manufactured mRNA vaccines through collaboration with government and industry.
In December 2025, we entered into an agreement with the Coalition for Epidemic Preparedness Innovations (CEPI) under which CEPI will provide up to $54 million in funding to support a pivotal Phase 3 clinical trial for our investigational mRNA-based H5 pandemic influenza vaccine candidate, mRNA-1018, which is expected to begin in early 2026. If licensure is granted and in the event of an influenza pandemic, Moderna is committed to working to provide people around the world with rapid, equitable access to the resulting H5 vaccine, including, as part of this agreement, allocating 20% of its H5 pandemic vaccine manufacturing capacity for timely supply to low- and middle-income countries at affordable pricing.
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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,
2025 2024 2023
United States $ 1,165 $ 1,726 $ 1,720
Europe 50 573 1,353
Rest of world
603 810 3,598
Total $ 1,818 $ 3,109 $ 6,671
Net product sales by product were as follows (in millions):
Years Ended December 31,
2025 2024 2023
COVID (1)
$ 1,810 $ 3,084 $ 6,671
RSV 8 25 —
Total $ 1,818 $ 3,109 $ 6,671
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(1) Includes sales of Spikevax and mNEXSPIKE.
As of December 31, 2025, we have three commercial products, our COVID vaccines, Spikevax and mNEXSPIKE, and our RSV vaccine, mRESVIA. mRESVIA was approved by the FDA in May 2024 for adults aged 60 years and older, and in June 2025, the approved use was expanded to include adults aged 18 through 59 years who are at increased risk for lower respiratory tract disease (LRTD) caused by RSV. We launched commercial sales of mRESVIA in the third quarter of 2024. In May 2025, mNEXSPIKE was approved for use in adults aged 65 years and older, as well as individuals aged 12 through 64 years with at least one underlying risk factor. We launched commercial sales of mNEXSPIKE in the third quarter of 2025.
We sell our COVID and RSV vaccines to the commercial market as well as to foreign governments and international organizations. 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. 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.
The following table summarizes product sales provision for the periods presented (in millions):
Years Ended December 31,
2025 2024 2023
Gross product sales $ 3,304 $ 4,517 $ 8,203
Product sales provision:
Wholesaler chargebacks, discounts and fees
(1,037) (1,141) (976)
Returns, rebates and other fees
(449) (267) (556)
Total product sales provision (1)
$ (1,486) $ (1,408) $ (1,532)
Net product sales $ 1,818 $ 3,109 $ 6,671
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(1) Includes an adjustment of approximately $216 million in 2024, reflecting a reduction in prior year provision estimates, primarily related to returns and chargebacks for the previous COVID vaccine season. Adjustments recorded in 2025 related to prior year provision estimates were not material.
Certain agreements may include upfront payments for our vaccine supply, initially recorded as deferred revenue. As of December 31, 2025, we had deferred revenue of $107 million related to product sales, of which $42 million is expected to be realized in less than one year.
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Other revenue
Other revenue comprises grant revenue, collaboration revenue, licensing and royalty revenue and stand-ready manufacturing revenue. Grant and collaboration revenues have 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 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. Licensing and royalty revenue is related to our out-licensing agreement for mRNA COVID related intellectual property in Japan, executed in 2024. Stand-ready manufacturing revenue relates to long-term strategic agreements with certain government entities to maintain manufacturing readiness, while the remaining consideration under these agreements is related to product sales.
The following table summarizes other revenue for the periods presented (in millions):
Years Ended December 31,
2025 2024 2023
Grant revenue $ 22 $ 37 $ 94
Collaboration revenue 13 48 83
Licensing and royalty revenue 11 42 —
Stand-ready manufacturing revenue 80 $ — $ —
Total other revenue $ 126 $ 127 $ 177
Cost of sales
Cost of sales includes raw materials, personnel, facility and other indirect overhead costs associated with manufacturing our commercial products. These costs include production materials, production costs at our manufacturing facilities, third-party manufacturing costs, and final formulation and packaging costs. Cost of sales also includes shipping costs, third-party royalties on net sales of our products, and charges for inventory valuation, excess and obsolete inventory and losses on firm purchase commitments.
Research and development expenses
The nature of our business and primary focus of our activities generate a significant amount of research and development costs.
Research and development expenses represent costs incurred by us for the following:
• cost to develop our platform;
• discovery efforts leading to development candidates;
• preclinical, nonclinical, and clinical development costs for our programs;
• cost to develop our manufacturing technology and infrastructure; and
• digital infrastructure costs related to our drug discovery efforts and clinical trials.
The costs above comprise the following categories:
• personnel-related expenses, including salaries, benefits, and stock-based compensation expense;
• expenses incurred under agreements with third parties, such as consultants, investigative sites, contract research organizations (CROs), that conduct our preclinical studies and clinical trials, and in-licensing arrangements;
• expenses associated with developing manufacturing, modification of formulation or design of a product or process, advancing the design to meet specific functional and economic requirements for manufacture and obtaining materials for preclinical studies, clinical trials and pre-launch inventory from internal and third-party contract manufacturing organizations (CMOs);
• expenses incurred for the procurement of materials, laboratory supplies, and non-capital equipment used in the research and development process;
• upfront fees and milestones paid to third-parties for licenses and technologies that had not reached technological feasibility and did not have an alternative future use; and
• facilities, depreciation, and amortization, and other direct and allocated expenses incurred as a result of research and development activities.
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We use our employee and infrastructure resources for the advancement of our platform, and for discovering and developing programs. 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.
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, 2025, 2024, and 2023 (in millions):
Years Ended December 31,
2025 2024 2023
Program-specific expenses by therapeutic area:
Infectious disease vaccines
$ 652 $ 1,297 $ 1,903
Oncology 201 154 62
Rare disease therapeutics
43 82 67
Total program-specific expenses by therapeutic area (1)
$ 896 $ 1,533 $ 2,032
Other research and development expenses:
Discovery and platform research
$ 356 $ 520 $ 751
Technical development and manufacturing expenses
792 1,081 1,116
Shared discovery and development expenses 797 1,145 789
Stock-based compensation 291 264 157
Total research and development expenses
$ 3,132 $ 4,543 $ 4,845
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(1) Includes a total of 25 development candidates at December 31, 2025, 34 development candidates at December 31, 2024, and 42 development candidates at December 31, 2023. 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 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.
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, technology and digital, facilities, and other directly attributable research support costs.
Technology development and manufacturing expenses are primarily related to manufacturing process development and manufacturing costs, including expenses for acquiring and manufacturing pre-launch inventory, mRNA supply for preclinical studies and clinical trials.
Shared discovery and development expenses are research and development costs such as personnel-related costs and other costs, such as the purchase of priority review vouchers. 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. We expense research and development costs as incurred and cannot reasonably estimate the nature, timing, and estimated costs required to complete the development of the development candidates and investigational medicines we are currently developing or may develop in the future.
Changes in expectations or outcomes of any of the known or unknown risks and uncertainties may materially impact our expected research and development expenditures. Continued research and development is central to the ongoing activities of our business. Investigational medicines in later stages of clinical development, such as our intismeran autogene, norovirus, and flu+COVID combination vaccine candidates, and development of any new COVID vaccines against variants of SARS-CoV-2, generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-
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stage clinical trials. In addition, we may incur research and development costs related to postmarketing commitments, though the timing and scope of such commitments remain uncertain. 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.
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. Moreover, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.
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, technology and digital and facility-related costs, and expenses associated with obtaining, maintaining, and defending intellectual property (IP). 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. These increases were driven by investments in building regulatory, sales, and marketing teams, establishing subsidiaries in multiple countries, and supporting operational growth. In 2025 and 2024, selling, general and administrative expenses decreased significantly year over year by $156 million and $375 million, or 13% and 24%, respectively. This decline reflects our focus on productivity improvements, cost-saving initiatives, and targeted investments that strengthen our overall efficiency.
Interest income
Interest income consists of interest generated from our investments in cash and cash equivalents, money market funds, and high-quality fixed income securities.
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. Interest expense is primarily derived from our finance leases related to our Moderna Technology Center prior to its acquisition in December 2024, certain contract manufacturing service agreements, and, beginning in November 2025, interest associated with our long-term debt (see Note 1 0 and Note 1 1 to the consolidated financial statements).
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. The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in estimates, if any, are reflected in the consolidated financial statements prospectively from the date of change in 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 requires the most significant judgments and estimates.
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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. In the third quarter of 2023, we commenced sales of Spikevax to the U.S. commercial market, in addition to continuing sales to foreign governments and organizations, and subsequently expanded our commercial COVID vaccine portfolio with the launch of mNEXSPIKE in the third quarter of 2025. 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.
We recognize net product sales when control of the product transfers to the customer, typically upon delivery. Net product sales are recognized net of estimated wholesaler chargebacks, invoice discounts for prompt payments and pre-orders, provisions for sales returns, government rebates, and other related deductions. 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. See 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. 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. While we now have two years of data on our product returns, this remains limited and subject significant variability given current market conditions. We will continue to refine 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.
Recently issued accounting pronouncements
See Note 2 - Summary of Significant Accounting Policies, to the consolidated financial statements, under the caption “Recently Issued Accounting Standards”.
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Results of operations
A discussion regarding our results of operations for the year ended December 31, 2025 compared to 2024 is presented below. A discussion regarding our results of operations for the year ended December 31, 2024 compared to 2023 can be found under Part II -Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the Securities and Exchange Commission (SEC) on February 21, 2025.
The following table summarizes our consolidated statements of operations for the periods presented (in millions):
Years Ended December 31, Change 2025 vs. 2024
2025 2024 Change %
Revenue:
Net product sales $ 1,818 $ 3,109 $ (1,291) (42) %
Other revenue 126 127 (1) (1) %
Total revenue 1,944 3,236 (1,292) (40) %
Operating expenses:
Cost of sales 868 1,464 (596) (41) %
Research and development 3,132 4,543 (1,411) (31) %
Selling, general and administrative 1,018 1,174 (156) (13) %
Total operating expenses 5,018 7,181 (2,163) (30) %
Loss from operations (3,074) (3,945) 871 (22) %
Interest income 314 425 (111) (26) %
Other expense, net (8) (87) 79 (91) %
Loss before income taxes (2,768) (3,607) 839 (23) %
Provision for (benefit from) tax provision 54 (46) 100 (217) %
Net loss $ (2,822) $ (3,561) $ 739 (21) %
Revenue
Total revenue decreased by $1.3 billion, or 40%, in 2025, primarily driven by a decline in net product sales. Net product sales decreased by $1.3 billion, or 42%, in 2025, largely due to lower sales volumes of our COVID vaccine across all regions. In the U.S., net product sales declined compared to 2024, reflecting a year-over-year decline in overall COVID vaccine demand. This decrease was partially offset by increased market share in the retail channel, supported by the successful launch and performance of mNEXSPIKE during the 2025/2026 respiratory vaccination season. In Europe and the rest of the world, net product sales declined compared to 2024, driven largely by the completion of advance purchase agreements related to COVID vaccines with government customers that contributed to revenue in the prior year, as well as lower overall demand in these markets. These impacts were partially offset by product sales generated under long-term strategic partnerships with government entities through our in-country manufacturing arrangements. Other revenue was relatively consistent compared to 2024, as lower grant revenue, collaboration revenue, and licensing and royalty revenue were largely offset by higher stand-ready manufacturing revenue.
Product sales are expected to return to growth in 2026, supported by the full-year impact of long-term strategic partnerships with government entities, as well as continued uptake of mNEXSPIKE in the U.S.
Operating expenses
Cost of sales
Our cost of sales was $868 million, or 48% of our net product sales, in 2025, including third-party royalties of $88 million, inventory write-downs of $291 million, primarily for raw materials and our finished and semi-finished COVID vaccine inventory, and unutilized manufacturing capacity and wind-down costs of $93 million. 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, unutilized manufacturing capacity and wind down costs of $368 million, and losses on firm purchase commitments and cancellation fees of $60 million. These charges in both 2025 and 2024, other than royalties, were largely driven by customer demand forecast adjustments related to the seasonal nature of the COVID vaccine market, termination of third-party contract manufacturing service agreements, and commitments for
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manufacturing capacity and raw material purchase agreements. Forecasting demand for COVID vaccines requires advance production planning ahead of each season, including production of multiple COVID vaccine products, which resulted in excess inventory and capacity as actual demand differed from forecasted demand. See Note 7 to our consolidated financial statements for further details on inventory related charges and this initiative.
Cost of sales for 2025 decreased by $596 million, or 41%, compared to 2024. As a percentage of net product sales, cost of sales was 48% in 2025 compared to 47% in 2024, remaining relatively consistent year over year. The decrease in cost of sales was primarily driven by reduced inventory write-downs, reduced unutilized manufacturing capacity and wind-down costs, lower losses on purchase commitments, and lower sales volume. In 2024, cost of sales included $238 million of wind-down costs related to the termination of a contract manufacturing agreement, whereas wind-down costs incurred in 2025 were significantly lower. As a result, the cost of sales as a percentage of net product sales remained relatively consistent year over year, as the benefit of a more efficient manufacturing cost structure was largely offset by lower product sales.
In 2026, we anticipate that cost of sales will remain at a relatively consistent level compared to 2025, reflecting continued manufacturing productivity improvements and operational efficiencies. To the extent net product sales increase, cost of sales as a percentage of net product sales may decrease modestly.
Research and development expenses
Research and development expenses decreased by $1.4 billion, or 31%, in 2025. The decrease was primarily attributable to lower clinical trial expenses of $578 million and lower clinical manufacturing expenses of $239 million, reflecting the wind-down of large Phase 3 respiratory programs and the timing of certain clinical trial activities shifting into 2026, partially offset by increased investment in our norovirus vaccine and oncology program. In addition, preclinical research expenses decreased by $107 million due to continued portfolio prioritization across the organization, and consulting and outside service costs declined by $175 million, consistent with the lower level of clinical and manufacturing activities. Separately, the prior-year period included an expense related to the purchase of two priority review vouchers, which did not recur in 2025.
We anticipate a modest reduction in research and development expenses in 2026 compared to 2025, driven by continued portfolio prioritization, disciplined cost management, and a focused approach to pipeline execution. These reductions are expected to be partially offset by certain clinical trial activities shifting into 2026 and additional costs related to post-marketing commitments. We remain committed to advancing our pipeline and late-stage programs, including intismeran autogene and norovirus vaccine programs, while continuing to manage research and development investment levels in line with our long-term objectives.
Selling, general and administrative expenses
Selling, general and administrative expenses decreased by $156 million, or 13%, in 2025. The decrease was mainly due to a $57 million broad-based reduction in consulting and outside services, along with a $59 million reduction in commercial, marketing and distribution costs. These decreases were attributable to continued cost discipline and ongoing efforts to streamline operations.
We expect selling, general and administrative expenses in 2026 to remain at a level relatively consistent with 2025, reflecting an efficient and scalable operating structure. While we will continue to make selective investments to support our key priorities, including our global commercial and regulatory activities, we expect these investments to be largely offset by ongoing efficiency initiatives and disciplined resource allocation.
Interest income
Interest income generated from our investments in marketable securities decreased by $111 million in 2025, mainly due to lower average investment balances.
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Other expense, net
The following table summarizes other expense, net for the periods presented (in millions):
Years Ended December 31, Change 2025 vs. 2024
2025 2024 Change %
Loss on investments
$ (5) $ (56) $ 51 (91) %
Interest expense
(10) (24) 14 (58) %
Other income (expense), net
7 (7) 14 (200) %
Total other expense, net $ (8) $ (87) $ 79 (91) %
Total other expense, net decreased by $79 million, or 91%, in 2025. The decrease was primarily driven by lower equity investment losses and lower interest expense. Interest expense is primarily related to our finance leases related to our Moderna Technology Center prior to its acquisition in December 2024, certain contract manufacturing service agreements, and, beginning in November 2025, interest associated with our long-term debt. See Note 10 and N ote 11 to our consolidated financial statements for additional information.
Provision for income taxes
Provision for income taxes for 2025 remained immaterial and consistent with 2024 and 2023, reflecting the valuation allowance established on deferred tax assets in 2023, which has been applied consistently since its initial recognition. Provision for income taxes increased by $100 million, or 217%, in 2025, mainly driven by the absence of a discrete tax benefit related to research and development credits that was recognized in 2024, as well as taxable income in certain of our foreign subsidiaries, while we incurred a consolidated pre-tax loss. See Note 1 4 to our consolidated financial statements for additional details.
Liquidity and capital resources
The following table summarizes our cash, cash equivalents, investments and working capital for each period presented (in millions):
December 31,
2025 2024
Financial assets:
Cash and cash equivalents $ 2,595 $ 1,927
Investments 3,204 5,098
Investments, non-current 2,336 2,494
Total $ 8,135 $ 9,519
Working capital:
Current assets $ 6,544 $ 8,099
Current liabilities 1,987 2,206
Total $ 4,557 $ 5,893
Our cash, cash equivalents and investments are invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Our investments, consisting primarily of government and corporate debt securities, are stated at fair value. Cash, cash equivalents and investments as of December 31, 2025 decreased by $1.4 billion, or 15%, compared to December 31, 2024. For the year ended December 31, 2025, we had a net cash outflow from operations of $1.9 billion, and purchases of property, plant and equipment of $192 million, partially offset by $578 million of net proceeds from our credit facility.
Working capital, defined as current assets less current liabilities, as of December 31, 2025 decreased by $1.3 billion, or 23%, compared to December 31, 2024. This was primarily due to a $1.2 billion decrease in cash, cash equivalents and short-term investments, mainly used to fund our operating activities, a $191 million decrease in prepaid expenses and other current assets driven by reduced manufacturing and capital spend, and a $174 million decrease in accounts receivable, primarily driven by lower revenue and invoice volumes as well as timing of collections. These decreases were partially offset by a $129 million reduction in accounts payable and accrued liabilities, reflecting an overall reduction in operating expenses, and a $54 million reduction in short-term deferred revenue, mainly resulting from revenue recognized from deferred revenue in excess of customer advance payments received.
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Cash flow
The following table summarizes the primary sources and uses of cash for the periods presented (in millions):
Years Ended December 31,
2025 2024
Net cash (used in) provided by:
Operating activities
$ (1,873) $ (3,004)
Investing activities
1,946 1,949
Financing activities
593 56
Operating activities
We derive cash flows from operations primarily from cash collected from customer advance payments and accounts receivable related to our product sales, as well as other revenue and funding arrangements. Our cash flows from operating activities are significantly affected by our use of cash for operating expenses and working capital to support the business. We sell our COVID and RSV vaccines to the commercial market as well as to foreign governments and international organizations. Certain supply agreements include upfront payments, which are initially recorded as deferred revenue. 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, which typically do not make upfront payments. In addition, we receive customer advance payments related to certain other revenue arrangements. As of December 31, 2025, we had $252 million in deferred revenue related to customer advance payments received or billable.
Net cash used by operating activities in 2025 was $1.9 billion and consisted of net loss of $2.8 billion and non-cash adjustments of $716 million, plus a net change in assets and liabilities of $233 million. Non-cash items primarily included stock-based compensation of $483 million and depreciation and amortization of $215 million. The net change in assets and liabilities was primarily due to a decrease in accounts receivable of $156 million, mainly due to lower invoice volumes and timing of collections, a $153 million decrease in prepaid expenses and other current assets, primarily due to reduced manufacturing and capital spend, and a $41 million decrease in deferred revenue due to revenue recognized from deferred revenue in excess of customer advance payments received. This was partially offset by a decrease in accounts payable and accrued liabilities of $94 million resulting from overall lower operating expenses in the period.
Net cash used by operating activities decreased by $1.1 billion, or 38%, in 2025 compared to 2024. This decrease was primarily driven by a decrease in net loss of $739 million, a change in deferred revenue of $480 million, reflecting less revenue recognized from deferred revenue in excess of customer advance payments received in 2025, and a change in accounts payable and accrued liabilities of $360 million, driven by decreased clinical and manufacturing spend. This was partially offset by a change in accounts receivable of $378 million, driven by lower invoice volumes and timing of collections, and a change in inventory of $117 million, driven by a smaller reduction in inventory write-downs.
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.
Net cash provided by investing activities in 2025 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 $2.4 billion, partially offset by purchases of marketable securities of $5.8 billion, and purchases of property, plant and equipment of $192 million.
Net cash flows provided by investing activities were relatively consistent in 2025 compared to 2024, primarily due to a decrease in proceeds from sale of marketable securities of $1.6 billion, which was partially offset by a decrease of $859 million in purchases of property, plant, and equipment, and a $761 million decrease in purchases of marketable securities.
Financing activities
Our primary financing activities consist of issuance of common stock related to our equity plans, repurchases of common stock, borrowings under our credit facility, and finance leases.
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Net cash provided by financing activities in 2025 was $593 million, consisting of $578 million of net proceeds from our credit facility and 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 $35 million.
Net cash provided by financing activities increased by $537 million, or 959%, in 2025 compared to 2024, mainly due to the net proceeds from our credit facility.
Operation and funding requirements
Our principal sources of funding as of December 31, 2025 consisted of cash and cash equivalents, investments, and cash we may generate from operations. We reported a net loss of $2.8 billion, $3.6 billion and $4.7 billion for the years ended December 31, 2025, 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. From our inception to the end of 2020, we incurred significant losses from operations due to our significant research and development expenses. We have retained earnings of $7.2 billion as of December 31, 2025.
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. This also extends to our manufacturing costs, including our arrangements with our manufacturers and suppliers. Our ongoing work on our intismeran autogene, norovirus, and flu+COVID combination vaccine candidates, 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 collaborators or alliances. We may also incur additional costs related to postmarketing commitments, though the timing and scope of such commitments remain uncertain. 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 arrangements, we receive funding. However, for all these arrangements, we may be obligated to make potential future milestone and royalty payments.
In November 2025, we entered into a Credit Agreement providing for a term loan facility with aggregate commitments of $1.5 billion. As of December 31, 2025, we had drawn $600 million under the initial term loan. The Credit Agreement also provides for $900 million of delayed draw term loan commitments, consisting of $400 million available, subject to applicable conditions, through November 2027 and $500 million available, subject to applicable conditions and specified regulatory approval milestones, through November 2028. Borrowings under the Credit Agreement bear interest at a variable rate based on Term SOFR or a base rate, at our option, plus an applicable margin, with interest payable periodically and the principal amount due in full at maturity in November 2030. The Credit Agreement includes customary affirmative and negative covenants, with which we were in compliance as of December 31, 2025. See Note 11 to our consolidated financial statements for additional information.
We believe that our cash, cash equivalents, and investments as of December 31, 2025, together with cash expected to be generated from product sales and available borrowings under our credit facility, 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 are subject to all the risks related to the development and commercialization of novel medicines, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors, which may adversely affect our business. For example, we experienced a decline in customer demand for our COVID vaccine in 2023 and 2024, and this trend has continued into 2025 as the market transitions to a more competitive and commercially driven environment. 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. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors. 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.
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Contractual obligations and commitments
The following table summarizes our contractual obligations as of December 31, 2025, 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
$ 1,066 $ 65 $ 159 $ 162 $ 680
Financing leases
47 27 20 — —
Purchase obligations (1)
1,438 481 441 343 173
Long-term debt (2)
900 62 130 708 —
Total contractual cash obligations $ 3,451 $ 635 $ 750 $ 1,213 $ 853
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(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. As of December 31, 2025, $5 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.
(2) In November 2025, we entered into the Credit Agreement providing for a senior secured term loan facility with aggregate commitments of $1.5 billion, consisting of a $600 million initial term loan and $900 million of delayed draw term loan commitments. As of December 31, 2025, the $600 million initial term loan was outstanding and matures on November 24, 2030. Borrowings under the Credit Agreement bear interest at a variable rate. Interest amounts preset in the table are based on the applicable interest rate in effect as of December 31, 2025. The principal amount of $600 million is due in full at maturity, and no principal payments are required prior to that date. See Note 11 to the consolidated financial statements for additional details.
We have agreements with certain vendors for various services, including services related to clinical operations and support and contract manufacturing, which we are not contractually able to terminate for convenience. Certain agreements provide for termination rights subject to termination fees or wind down costs. Under such agreements, we are contractually obligated to make certain payments to vendors, mainly to reimburse them for their unrecoverable outlays incurred prior to cancellation. The exact amounts of such obligations are dependent on the timing of termination, and the exact terms of the relevant agreement and cannot be reasonably estimated. At December 31, 2025, we had cancelable open purchase orders of approximately $1.8 billion, reflecting amounts associated with our significant vendor arrangements, 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, 2025, assuming we would not cancel these agreements. The actual amounts we pay in the future to the vendors under such agreements may differ from purchase order amounts.
In addition to the above obligations, we enter into a variety of agreements and financial commitments in the normal course of business. The terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs, prior to the delivery of goods or performance of services. It is not possible to predict the maximum potential amount of future payments under these agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement.
As of December 31, 2025, 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.
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Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Interest Rate Risk
As of December 31, 2025 and 2024, we had cash, cash equivalents, restricted cash, and investments in marketable securities of $8.1 billion and $9.5 billion, respectively. Our investment portfolio comprises money market funds and marketable debt securities (including U.S. Treasury securities, debt securities of U.S. government agencies and corporate entities, and commercial paper), which are classified as available-for-sale securities. Our primary investment objectives are the preservation of capital and the maintenance of liquidity, and our investment policy defines allowable investments based on quality of the institutions and financial instruments designed to minimize risk exposure. Our exposure to interest rate sensitivity is affected by changes in the general level of U.S. interest rates. Our marketable securities are subject to interest rate risk and will fall in value if market interest rates increase. Due to the short-term maturities and low risk profiles of our investments, we do not anticipate a significant exposure to interest rate risk. If market interest rates were to increase immediately and uniformly by one percentage point from levels at December 31, 2025, the net fair value of our marketable securities would decrease by approximately $47 million.
In November 2025, we entered into a variable-rate Credit Agreement providing for borrowings of up to $1.5 billion, under which outstanding amounts bear interest at rates based on Term SOFR plus a margin of 5.50% or a base rate plus a margin of 4.50%, at our option. As a result, our interest expense is exposed to changes in market interest rates. As of December 31, 2025, we had $600 million outstanding under this facility. See Note 11 to the consolidated financial statements for additional details.
Foreign Currency Risk
We transact business in various foreign currencies and have international sales and expenses denominated in foreign currencies. As a result, we are exposed to risks arising from changes in foreign currency exchange rates driven by both our business operations and economic conditions. For the year ended December 31, 2025, approximately 27% of our revenue was denominated in foreign currencies, although our revenue generating activities and operations continued to be primarily denominated in U.S. dollars. Our foreign currency revenue exposure in 2025 was primarily associated with the Canadian dollar, Euro, Korean won, and Mexican peso markets.
As our business evolves, we have transitioned to receiving payments in local currencies rather than U.S. dollars. In addition, during 2025 we established and expanded manufacturing operations in the United Kingdom, Canada and Australia, where we also transact in foreign currencies. These developments are expected to result in higher levels of foreign currency denominated revenues and expenses on an annualized basis in the future, which may increase our exposure to fluctuations in foreign currency exchange rates and could 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. While cash flow hedging programs are in place, there were no foreign currency cash flow hedging activities during 2025.
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, British pound, Canadian dollar, and Euro that are not designated for hedge accounting treatment. Therefore, these forward contracts are accounted for as derivatives whereby the fair value of the contracts are reported as prepaid expenses and other current assets or other current liabilities in our consolidated balance sheets, and gains and losses resulting from changes in the fair value are recorded as a component of other income (expense), net, in our consolidated statements of operations. The gains and losses on these foreign currency forward contracts generally offset the gains and losses in the underlying foreign currency denominated assets and liabilities, which are also recorded to other income (expense), net, in our consolidated statements of operations. As of December 31, 2025, 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. 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.
97
Notwithstanding our efforts to mitigate some foreign currency exchange risks, there can be no assurance that our hedging activities will adequately protect us against the risks associated with foreign currency fluctuations. As of December 31, 2025, 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 $58 million. 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.
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Item 8. Financial Statements and Supplementary Data
MODERNA, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
100
Consolidated Balance Sheets as of December 31, 202 5 and 20 24
102
Consolidated Statements of Operations for the years ended December 31, 202 5 , 202 4 , and 20 23
103
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 202 5 , 202 4 , and 2 023
104
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 202 5 , 202 4 , and 20 23
105
Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 , and 20 23
107
Notes to Consolidated Financial Statements
108
99
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Moderna, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Moderna, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 20, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Provisions for returns on product sales
Description of the Matter During the year ended December 31, 2025, the Company’s net product sales were $1.8 billion. As explained in Note 2 of the consolidated financial statements, revenue from product sales includes estimates of variable consideration for which provisions are established, including provisions for product sales returns.
Auditing the Company’s measurement of provisions for returns on product sales under its contracts with customers was especially challenging because (1) the estimate relies on management’s assumptions regarding inventory remaining in the distribution channel as of the balance sheet date that may be subject to return in future periods, as well as projected market demand, and (2) the Company has limited historical returns on which to base its assumptions.
How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the Company’s process to determine provisions for returns on product sales. For example, we tested controls over management’s review of the completeness and accuracy of the data used in the process and the assumptions about the amount of inventory in the distribution channel that could be subject to return in future periods.
To test the Company’s provisions for returns on product sales, our audit procedures included, among other procedures, testing the accuracy and completeness of the underlying data used in the calculations and evaluating the assumptions applied by management in estimating the provisions. To test management’s assumptions, we inspected agreements with significant customers to validate the rights of return, made inquiries of members of the commercial function regarding any changes to the terms and conditions of commercial contracts, and assessed the historical accuracy of management’s estimates. We also examined credit memos issued during and after year end to identify any unusual items or trends inconsistent with the Company’s analysis of product returns and performed revenue cutoff testing at period end to evaluate whether any unusual trends should have been considered in the Company’s analysis of product returns. In addition, we reviewed inventory on hand-reporting from significant customers around the balance sheet date and subsequent to the balance sheet date and inspected vaccination data from third-party sources after the balance sheet date. We also performed sensitivity analyses on the Company’s return rate to assess the impact of changes in assumptions.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2014.
Boston, Massachusetts
February 20, 2026
101
MODERNA, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
December 31,
2025 2024
Assets
Current assets:
Cash and cash equivalents $ 2,595 $ 1,927
Investments 3,204 5,098
Accounts receivable, net 184 358
Inventory 153 117
Prepaid expenses and other current assets 408 599
Total current assets 6,544 8,099
Investments, non-current 2,336 2,494
Property, plant and equipment, net 2,134 2,196
Right-of-use assets, operating leases 719 759
Other non-current assets 605 594
Total assets $ 12,338 $ 14,142
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 317 $ 405
Accrued liabilities 1,386 1,427
Deferred revenue 99 153
Other current liabilities 185 221
Total current liabilities 1,987 2,206
Deferred revenue, non-current 153 58
Operating lease liabilities, non-current 653 671
Financing lease liabilities, non-current 20 39
Long-term debt 590 —
Other non-current liabilities 285 267
Total liabilities 3,688 3,241
Commitments and contingencies ( Note 12 )
Stockholders’ equity:
Preferred stock, $ 0.0001 ; 162 shares authorized as of December 31, 2025 and 2024; no shares issued or outstanding at December 31, 2025 and 2024
— —
Common stock, par value $ 0.0001 ; 1,600 shares authorized as of December 31, 2025 and 2024; 394 and 386 shares issued and outstanding as of December 31, 2025 and 2024, respectively
— —
Additional paid-in capital 1,382 866
Accumulated other comprehensive income (loss) 45 ( 10 )
Retained earnings 7,223 10,045
Total stockholders’ equity 8,650 10,901
Total liabilities and stockholders’ equity $ 12,338 $ 14,142
The accompanying notes are an integral part of these consolidated financial statements.
102
MODERNA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Years Ended December 31,
2025 2024 2023
Revenue:
Net product sales $ 1,818 $ 3,109 $ 6,671
Other revenue 126 127 177
Total revenue
1,944 3,236 6,848
Operating expenses:
Cost of sales 868 1,464 4,693
Research and development 3,132 4,543 4,845
Selling, general and administrative 1,018 1,174 1,549
Total operating expenses 5,018 7,181 11,087
Loss from operations ( 3,074 ) ( 3,945 ) ( 4,239 )
Interest income 314 425 421
Other expense, net ( 8 ) ( 87 ) ( 124 )
Loss before income taxes ( 2,768 ) ( 3,607 ) ( 3,942 )
Provision for (benefit from) tax provision 54 ( 46 ) 772
Net loss $ ( 2,822 ) $ ( 3,561 ) $ ( 4,714 )
Net loss per share
Basic and diluted
$ ( 7.26 ) $ ( 9.28 ) $ ( 12.33 )
Weighted average common shares used in calculation of loss per share:
Basic and diluted
389 384 382
The accompanying notes are an integral part of these consolidated financial statements.
103
MODERNA, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
Years Ended December 31,
2025 2024 2023
Net loss $ ( 2,822 ) $ ( 3,561 ) $ ( 4,714 )
Other comprehensive income, net of tax:
Available-for-sale securities:
Unrealized gains on available-for-sale securities 31 120 210
Less: net realized (gains) losses on available-for-sale securities reclassified in net loss ( 3 ) 4 38
Net increase from available-for-sale securities 28 124 248
Cash flow hedges:
Net realized losses on derivative instruments reclassified in net loss — — 8
Net increase from derivatives designated as hedging instruments — — 8
Gains (losses) on foreign currency translation 11 ( 8 ) —
Pension and postretirement obligation adjustments 16 ( 3 ) ( 9 )
Total other comprehensive income 55 113 247
Comprehensive loss $ ( 2,767 ) $ ( 3,448 ) $ ( 4,467 )
The accompanying notes are an integral part of these consolidated financial statements.
104
MODERNA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In millions)
Common Stock Additional
Paid-In
Capital Accumulated
Other
Comprehensive
Loss Retained Earnings Total
Stockholders’
Equity
Shares Amount
Balance at December 31, 2022 385 $ — $ 1,173 $ ( 370 ) $ 18,320 $ 19,123
Vesting of restricted common stock
1 — — — — —
Exercise of options to purchase common stock 4 — 25 — — 25
Issuance of common stock under employee stock purchase plan — — 21 — — 21
Stock-based compensation — — 305 — — 305
Other comprehensive income, net of tax — — — 247 — 247
Repurchase of common stock, including excise tax ( 8 ) — ( 1,153 ) — — ( 1,153 )
Net loss — — — — ( 4,714 ) ( 4,714 )
Balance at December 31, 2023 382 $ — $ 371 $ ( 123 ) $ 13,606 $ 13,854
Common Stock Additional
Paid-In
Capital Accumulated
Other
Comprehensive
Loss Retained Earnings Total
Stockholders’
Equity
Shares Amount
Balance at December 31, 2023 382 $ — $ 371 $ ( 123 ) $ 13,606 $ 13,854
Vesting of restricted common stock 2 — — — — —
Exercise of options to purchase common stock 1 — 42 — — 42
Issuance of common stock under employee stock purchase plan 1 — 24 — — 24
Stock-based compensation — — 429 — — 429
Other comprehensive income, net of tax — — — 113 — 113
Net loss — — — — ( 3,561 ) ( 3,561 )
Balance at December 31, 2024 386 $ — $ 866 $ ( 10 ) $ 10,045 $ 10,901
105
Common Stock Additional
Paid-In
Capital Accumulated
Other
Comprehensive (Loss) Income Retained Earnings Total
Stockholders’
Equity
Shares Amount
Balance at December 31, 2024 386 $ — $ 866 $ ( 10 ) $ 10,045 $ 10,901
Vesting of restricted common stock 7 — — — — —
Exercise of options to purchase common stock 1 — 17 — — 17
Tax payments related to net share settlements on equity awards — — ( 2 ) — — ( 2 )
Issuance of common stock under employee stock purchase plan — — 18 — — 18
Stock-based compensation — — 483 — — 483
Other comprehensive income, net of tax — — — 55 — 55
Net loss — — — — ( 2,822 ) ( 2,822 )
Balance at December 31, 2025 394 $ — $ 1,382 $ 45 $ 7,223 $ 8,650
The accompanying notes are an integral part of these consolidated financial statements.
106
MODERNA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Years Ended December 31,
2025 2024 2023
Operating activities
Net loss $ ( 2,822 ) $ ( 3,561 ) $ ( 4,714 )
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation 483 429 305
Depreciation and amortization 215 189 621
Amortization/accretion of investments ( 67 ) ( 95 ) ( 61 )
Loss on equity investments, net 8 52 35
Other non-cash items 77 60 7
Changes in assets and liabilities:
Accounts receivable, net 156 534 493
Prepaid expenses and other assets 153 145 1,802
Inventory ( 34 ) 83 747
Right-of-use assets, operating leases 38 ( 53 ) ( 605 )
Accounts payable ( 92 ) ( 69 ) 13
Accrued liabilities ( 2 ) ( 385 ) ( 340 )
Deferred revenue 41 ( 439 ) ( 2,060 )
Operating lease liabilities ( 21 ) 28 551
Other liabilities ( 6 ) 78 88
Net cash used in operating activities ( 1,873 ) ( 3,004 ) ( 3,118 )
Investing activities
Purchases of marketable securities ( 5,768 ) ( 6,529 ) ( 3,760 )
Proceeds from maturities of marketable securities 5,563 5,562 5,575
Proceeds from sales of marketable securities 2,353 3,967 3,206
Purchases of property, plant and equipment ( 192 ) ( 1,051 ) ( 707 )
Acquisition of business, net of cash acquired
— — ( 85 )
Purchase of intangible asset ( 10 ) — —
Investment in convertible notes and equity securities — — ( 23 )
Net cash provided by investing activities 1,946 1,949 4,206
Financing activities
Proceeds from credit facility 600 — —
Payment of credit facility issuance costs ( 22 ) — —
Proceeds from issuance of common stock through equity plans 35 66 46
Tax payments related to net share settlements on equity awards ( 2 ) — ( 1,153 )
Changes in financing lease liabilities ( 18 ) ( 10 ) ( 270 )
Net cash provided by (used in) financing activities 593 56 ( 1,377 )
Effect of changes in exchange rates on cash and cash equivalents 2 — —
Net increase (decrease) in cash, cash equivalents and restricted cash 668 ( 999 ) ( 289 )
Cash, cash equivalents and restricted cash, beginning of year 1,929 2,928 3,217
Cash, cash equivalents and restricted cash, end of year $ 2,597 $ 1,929 $ 2,928
Supplemental cash flow information
Cash paid (received) for income taxes $ 26 $ 197 $ ( 357 )
Cash paid for interest $ 10 $ 24 $ 39
Non-cash investing and financing activities
Purchases of property, plant and equipment included in accounts payable and accrued liabilities $ 83 $ 97 $ 130
The accompanying notes are an integral part of these consolidated financial statements.
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MODERNA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of the Business
Moderna, Inc. (collectively, with its consolidated subsidiaries, any of Moderna, we, us, our or the Company) is a biotechnology company advancing a new class of medicines made of messenger RNA (mRNA). mRNA medicines are designed to direct the body’s cells to produce intracellular, membrane or secreted proteins that have a therapeutic or preventive benefit with the potential to address a broad spectrum of diseases. 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 infectious disease vaccines, oncology therapeutics and rare disease therapeutics.
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. We currently have three commercial products—Spikevax® and mNEXSPIKE®, our COVID vaccines, and mRESVIA®, our vaccine against respiratory syncytial virus (RSV). Additionally, we also have a diverse development pipeline of 25 development candidates across our 35 development programs currently in clinical studies.
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative accounting principles generally accepted in the United States as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).
The consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
We have made estimates and judgments affecting the amounts reported in our consolidated financial statements and the accompanying notes. We base our estimates on historical experience and various relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods that are not readily apparent from other sources. Changes in our estimates are recorded in the financial results of the period in which the new information becomes available. The actual results that we experience may differ materially from our estimates.
Segment Information
The Company operates as a single operating and reportable segment, reflecting the integrated nature of our business focused on the research, development, and commercialization of mRNA-based medicines. Our Chief Executive Officer serves as the Chief Operating Decision Maker (CODM), responsible for assessing the Company's performance and making resource allocation decisions. The CODM evaluates financial information on a consolidated basis, focusing on key metrics such as total revenue, operating expenses, and net income or loss, which is our reported measure of segment profit or loss. The CODM allocates resources based on the Company's available cash resources, forecasted cash flow, and expenditures on a consolidated basis, as well as an assessment of the probability of success of its research and development activities. Resource allocation decisions are informed by budgeted and forecasted expense information, along with actual expenses incurred to date. Disaggregated profit or loss information at the program or functional level is not regularly provided to or relied upon by the CODM, as our integrated operating model emphasizes shared resources and centralized decision-making. The interdependent nature of our research, development, and commercialization activities, supported by common infrastructure such as our mRNA platform, makes further disaggregation of expenses less meaningful for assessing performance. Additionally, there are no segment managers accountable for operations, operating results, and planning for levels or components below the consolidated unit level.
108
Revenue Recognition
To determine the appropriate amount of revenue to be recognized for arrangements that we determine are within the scope of ASC 606, we perform the following five steps (the five-step model): (i) identify the contract(s) with our customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as each performance obligation is satisfied.
Net Product Sales
We sell our COVID and RSV vaccines to the commercial market as well as to foreign governments and international organizations. 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. Payment terms generally range from 30 to 60 days , in line with customary practices in each country. Net product sales are recognized net of estimated wholesaler chargebacks, invoice discounts for prompt payments and pre-orders, provisions for sales returns, government rebates, and other related deductions. These provisions are recorded based on contractual terms, our estimate of returns for product sold during the period, and other relevant considerations, using the expected value method or the most likely amount method. We update our estimates quarterly and record necessary adjustments in the period when we identify the adjustments. Product sales, net of provisions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable when the uncertainty associated with the provisions is subsequently resolved. Shipping and handling activities are considered fulfillment activities and not a separate performance obligation. Taxes assessed by governmental authorities that are imposed on and collected from our product sales are excluded from net product sales.
Wholesaler chargebacks, discounts and fees
We contract with retailers, healthcare providers, and group purchasing organizations (GPO) to broaden our customer reach and offer contractual discounts. The chargeback represents the difference between the invoice price billed to the wholesaler and the negotiated price charged to the retailers, healthcare providers and GPO members. For distribution and related services, such as stocking and cold chain storage, we provide compensation to our wholesalers and distributors. We typically offer our customers invoice discounts on product sales for prompt payments and pre-orders. The estimation of these discounts and fees is based on contractual terms and our expectations regarding future customer payment behaviors. Wholesaler fees and invoice discounts are deducted from our gross product sales and accounts receivable at the time such product sales are recognized.
Product returns
We typically offer customers in the U.S. the right to return products, up to a certain limit as stipulated in our contracts. Estimated returns for our vaccines are determined considering available return rates for similar products, estimated levels of inventory in the distribution channel, projected market demand, and our historical experience with returns. The estimated amount for product returns is presented within accrued liabilities on our consolidated balance sheets and is deducted from our gross product sales in the period the related product sales are recognized.
Government rebates and other fees
Fees payable to third party payers and healthcare providers, along with fees to our direct customers that are settled via cash payments, including certain patient assistance programs, are recorded as accrued liabilities on our consolidated balance sheets. In 2024, we began recognizing Medicare rebates associated with our RSV product. The estimation of Medicare rebates requires judgment and is based on historical utilization trends, and the mix of customers and payers. The estimated liability for unpaid or unbilled rebates is presented as accrued liabilities on our consolidated balance sheets. For 2024 and 2025, the product sales subject to Medicare rebates were immaterial.
Determining the amount of variable consideration to recognize necessitates substantial judgment, especially 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 continues to present the most significant judgment due to the broad range of potential outcomes and the lack of established return trends. While we now have two years of data on our product returns, this remains limited and subject to significant variability given current market conditions. We will continue to refine 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.
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Other Revenue
Other revenue consists primarily of grant revenue, collaboration revenue, licensing and royalty revenue, and stand-ready manufacturing revenue.
Grant revenue
We have contracts with government-sponsored and private organizations for research and development related activities that provide for payments for reimbursed costs, which may include overhead and general and administrative costs as well as a related profit margin. We recognize grant revenue from these contracts as we perform services under these arrangements when the funding is committed. Associated expenses are recognized when incurred as research and development expense. Grant revenue and related expenses are presented gross in the consolidated statements of operations as we have determined we are the primary obligor under the arrangements relative to the research and development services we perform as lead technical expert.
Collaboration Revenue
We have entered into strategic collaborations and other similar arrangements with third parties for research and other licenses, development and commercialization of certain products and product candidates. Such arrangements provide for various types of payments to us, including upfront fees, funding of research and development services and preclinical and clinical material, technical, development, regulatory, and commercial milestone payments, licensing fees, option exercise fees, and royalty and earnout payments on product sales. Such payments are often not commensurate with the timing of revenue recognition and therefore result in deferral of revenue recognition. We recognize revenue based on the amount of the transaction price that is allocated to each respective performance obligation when or as the performance obligation is satisfied by transferring a promised good or service to the customer.
Licensing and Royalty Revenue
License revenue is recognized when the license is granted to the licensee, provided no significant performance obligations remain. Royalty revenue is recognized based on sales by licensees when the underlying sales occur, in accordance with the terms of the licensing agreement and when collectibility is reasonably assured.
Stand-Ready Manufacturing Revenue
We have entered into long-term strategic agreements with government entities to establish domestic mRNA manufacturing capabilities and support pandemic readiness. Under these agreements, we are required to build and maintain manufacturing facilities and to supply vaccines in accordance with minimum spend commitments or annual demand forecasts established by the respective governments. A portion of the total consideration under each agreement is allocated to a stand-ready obligation to maintain manufacturing readiness and is recognized as other revenue on a straight-line basis over the contractual period. The remaining consideration is related to our obligation to supply vaccines and will be recognized as product sales when control of the vaccines transfers upon delivery.
Cash and Cash Equivalents
We consider all highly liquid investments with an original maturity of 90 days or less from the date of purchase to be cash equivalents.
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Cash, Cash Equivalents and Restricted Cash shown in the Consolidated Statements of Cash Flows
The following table provides a reconciliation of cash, cash equivalents and restricted cash in the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in millions):
December 31,
2025 2024 2023
Cash and cash equivalents $ 2,595 $ 1,927 $ 2,907
Restricted cash (1)
1 1 17
Restricted cash, non-current (2)
1 1 4
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 2,597 $ 1,929 $ 2,928
_______
(1) Included in prepaid expenses and other current assets in the consolidated balance sheets.
(2) Included in other non-current assets in the consolidated balance sheets.
Investments
We invest our excess cash balances in marketable debt securities. We classify our investments in marketable debt securities as available-for-sale. We report our available-for-sale securities at fair value at each balance sheet date, and include any unrealized holding gains and losses (the adjustment to fair value) in accumulated other comprehensive income (loss), a component of stockholders’ equity. Realized gains and losses are determined using the specific-identification method, and are included in other income (expense), net in our consolidated statements of operations. We classify our available-for-sale securities as current or non-current based on each instrument’s underlying effective maturity date and for which we have the intent and ability to hold the investment for a period of greater than 12 months. Available-for-sale securities with maturities of less than 12 months are classified as current and are included in investments in the consolidated balance sheets. Available-for-sale securities with maturities greater than 12 months for which we have the intent and ability to hold the investment for greater than 12 months are classified as non-current and are included in investments, non-current in the consolidated balance sheets.
We evaluate securities for impairment at the end of each reporting period. Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation. Factors considered include whether a decline in fair value below the amortized cost basis is due to credit-related factors or non-credit-related factors, the financial condition and near-term prospects of the issuer, and our intent and ability to hold the investment to allow for an anticipated recovery in fair value. A credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings. Any impairment that is not credit- related is recognized in other comprehensive income (loss), net of applicable taxes.
Investments in publicly traded equity securities with readily determinable fair values are recorded at quoted market prices for identical securities, with changes in fair value recorded in other income (expense), net, in our consolidated statements of operations. Investments in equity securities without readily determinable fair values are recorded at cost minus impairment, if any, adjusted for changes resulting from observable price changes in orderly transactions for identical or similar securities. Such adjustments are recorded in other income (expense), net, in our consolidated statements of operations.
Accounts Receivable, net
Accounts receivable, net represent amounts due from customers less wholesalers chargebacks, discounts and fees (see our “Revenue Recognition” policy within Note 2 for product sales provision) and allowance for expected credit losses. Amounts payable to us are recorded as accounts receivable when our right to consideration is unconditional. To estimate the allowance for credit losses, we determine the allowance based on ongoing credit evaluation, historical experience and the aging of such receivables, among other factors. The allowance for doubtful accounts was immaterial at December 31, 2025 and 2024. Additionally, bad debt expenses were immaterial for the years ended December 31, 2025, 2024 and 2023.
Concentrations of Credit Risk
Financial instruments that subject us to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable debt securities, and accounts receivable, net. Our investment portfolio comprises money market funds and marketable debt securities, including U.S. Treasury securities, debt securities of U.S. government agencies and corporate entities and commercial paper. Our cash management and investment policy limits investment instruments to investment-grade securities with the objective to preserve capital and to maintain liquidity until the funds can be used in business operations. We invest in a variety of financial instruments and limit the amount of credit exposure with any individual financial institution.
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We are also subject to credit risk from our accounts receivable, net related to our net product sales and other revenue. We sell our products primarily to wholesalers and distributors and other governments and organizations. We do not require collateral or other security to support accounts receivable. To date, we have not experienced material losses with respect to the collection of our accounts receivable.
Significant Customers
Our accounts receivable, net are generally unsecured and are from customers in different countries. We generated revenue from product sales to wholesalers and distributors and other governments and organizations, and to a lesser extent, stand-ready manufacturing revenue from international government entities, grants made by government-sponsored and private organizations, and collaboration revenue from our strategic alliances.
A significant portion of our revenue to date has been generated from the following entities that accounted for more than 10% of total revenue and accounts receivable for the periods presented:
Percentage of Revenue
Years Ended December 31,
Percentage of
Accounts Receivable
December 31,
2025 2024 2023 2025 2024
FFF Enterprises
15 % 13 % * * *
Public Works and Government Services Canada 13 % * * 33 % *
Cardinal Health 11 % * * * *
United Kingdom Health Security Agency
* 16 % * * 65 %
Mexico Medistik
* * * 29 % *
Boryung Biopharma Korea
* * * 17 % *
Taiwan Food and Drug Administration
* * * * 10 %
Ministry of Health, Labor, and Welfare of Japan * * 21 % * *
________
* - Represents an amount of less than 10%
Fair Value Measurements
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. ASC 820 (Fair Value Measurement ) establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and our assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from our independent sources. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used to value the assets and liabilities:
• Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
• Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or
• Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Our cash equivalents and marketable debt securities are reported at fair value determined using Level 1 and Level 2 inputs ( Note 6 ). The fair value of our foreign currency forward contracts is calculated using Level 2 inputs, which include currency spot rates, forward rates, interest rate curve and credit or non-performance risk.
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Inventory
Inventory is recorded at the lower of cost or net realizable value, with cost determined principally using first-in, first-out method. We periodically review the composition of inventory in order to identify excess, obsolete, slow-moving or otherwise unsaleable items. If unsaleable items are observed and there are no alternate uses for the inventory, we will record a write-down to net realizable value in the period that the decline in value is first recognized through a charge to cost of sales. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required. We also assess whether we have any excess firm, non-cancelable, purchase commitment liabilities, resulting from our supply agreements with third-party vendors. The determination of net realizable value and firm purchase commitment liabilities requires judgment, including consideration of many factors, such as estimates of future product demand, product net selling prices, current and future market conditions, potential product obsolescence, expiration and utilization of raw materials under firm purchase commitments and contractual minimums, among others. We hold raw materials beyond our one year forecasted production plan, which were classified as non-current and included in other non-current assets in our consolidated balance sheets.
Pre-launch Inventory
Costs relating to raw materials and production of inventory in preparation for product launch prior to regulatory approval are capitalized when future commercialization is considered probable, the future economic benefit is expected to be realized, and we believe that material uncertainties related to the ultimate regulatory approval have been significantly reduced. For pre-launch inventory that is capitalized, we consider a number of factors based on the information available at the time, including the product candidate’s current status in the drug development and regulatory approval process, results from the related clinical trials, results from meetings with relevant regulatory agencies prior to the filing of regulatory applications, potential impediments to the approval process such as product safety or efficacy, historical experience, viability of commercialization and market trends. As of December 31, 2025 and 2024, we did not have any capitalized pre-launch inventory on our consolidated balance sheets.
Property, Plant and Equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of property, plant and equipment are described below:
Estimated Useful Life
Land and permanent land improvements
Not depreciated
Limited-life land improvements
Determined on a project-by-project basis
Buildings and building improvements
Up to 40 years
Manufacturing and laboratory equipment 5 - 12 years
Leasehold improvements
Lesser of estimated useful life of improvement
or remaining life of related lease
Computer equipment and software
3 to 5 years
Furniture, fixtures and other
5 years
Right-of-use asset, financing Lease term
Construction in progress includes direct costs related to the construction of various property, plant and equipment, and is stated at original cost. Once the asset is placed into service, these capitalized costs will be allocated to certain property, plant and equipment categories and will be depreciated over the estimated useful life of the underlying assets.
Goodwill and Intangible Assets
Goodwill represents the excess of purchase price over the fair value of net assets acquired and is carried at cost. Goodwill is tested at least annually for impairment by assessing qualitative factors in determining whether it is more likely than not that the fair value of net assets is below their carrying amounts. To date, an impairment of goodwill has not been recorded.
Finite-lived intangible assets primarily consist of acquired intellectual property and regulatory approval and commercial sales milestone payments. These assets are recorded at cost, net of accumulated amortization, and amortized on a straight-line basis over their estimated useful lives.
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Impairment of Long-Lived Assets, including Intangibles and Lease Right-of-Use Assets
We evaluate our long-lived assets, which consist of property, plant and equipment, finite-lived intangibles and right-of-use assets to determine if facts and circumstances indicate that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, we assess the recoverability of the long-lived assets by comparing the projected future undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. If such review indicates that such cash flows are not expected to be sufficient to recover the recorded value of the assets, the assets are written down to their estimated fair values based on the expected discounted future cash flows attributable to the assets or based on appraisals. Impairment expenses for the years ended December 31, 2025, 2024 and 2023 were immaterial .
Leases
Leases are classified at their commencement date, which is defined as the date on which the lessor makes the underlying asset available for use by the lessee, as either operating or finance leases based on the economic substance of the agreement. We recognize lease right-of-use assets and related liabilities in our consolidated balance sheets for both operating and finance leases. Lease liabilities are measured at the lease commencement date as the present value of the future lease payments using the interest rate implicit in the lease. If the rate implicit is not readily determinable, we will utilize our incremental borrowing rate as of the lease commencement date. Lease right-of-use assets are initially measured as the lease liability plus direct costs and prepaid lease payments less lease incentives. The lease term is the non-cancelable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that an option will be exercised.
We recognize operating lease cost in operating expenses in our consolidated statements of operations, inclusive of rent escalation provisions and rent holidays, on a straight-line basis over the respective lease term. For our finance leases, we recognize depreciation expense associated with the leased asset acquired and recognize interest expense related to the portion of the financing in our consolidated statements of operations.
We do not separate non-lease components from lease components for all classes of underlying assets. We do not recognize right-of-use assets and lease liabilities for leases with a lease term of 12 months or less. Instead, these lease payments are recognized in the statements of operations on a straight-line basis over the lease term.
Collaboration Arrangements
We analyze our collaboration arrangements to assess whether they are within the scope of ASC 808 ( Collaborative Arrangements ) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities. To the extent the arrangement is within the scope of ASC 808, we assess whether aspects of the arrangement between us and our collaborator are within the scope of other accounting literature. If we conclude that some or all aspects of the arrangement represent a transaction with a customer, we account for those aspects of the arrangement within the scope of ASC 606 (Revenue from Contracts with Customers ). See our "Revenue Recognition" policy within Note 2 for additional discussion of revenue recognition under these types of arrangements. If we conclude that some or all aspects of the arrangement are within the scope of ASC 808 and do not represent a transaction with a customer, we recognize our allocation of the shared costs incurred with respect to the jointly conducted activities as a component of the related expense in the period incurred. Additionally, for any payments related to capital expenditures that are partially reimbursed by a collaborator, to the extent the underlying capital costs qualify for capitalization, any reimbursements received will offset the capitalized cost of the asset.
Research and Development Funding Arrangements
We have entered into research and development funding arrangements to support a targeted programs, under which a third party has committed to fund us up to a specified amount. Contingent upon the regulatory approval of the program, we are obligated to pay certain milestones and royalties as outlined in the respective agreements. We account for funding received under research and development arrangements as a reduction to expenses when substantive financial risk is transferred to the funding party. These arrangements are accounted for as an obligation to conduct research and development activities. The funding is recognized proportionally as the related costs are incurred, using an input method. Contingent payments, such as milestones or royalties, will be recognized separately upon achievement of the related conditions.
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Research and Development Costs