Moderna Inc

Previous wording

Our COVID-19 vaccine is our first commercial product and is marketed, where approved, under the name Spikevax®. Our original vaccine, mRNA-1273, targeted the SARS-CoV-2 ancestral strain, and we have leveraged our mRNA platform to rapidly adapt our vaccine to emerging SARS-CoV-2 strains to provide protection as the virus evolves and regulatory guidance is updated.

Current wording

Our COVID-19 vaccine is our first commercial product and is marketed, where approved, under the name Spikevax®. Our original vaccine, mRNA-1273, targeted the SARS-CoV-2 ancestral strain, and we have leveraged our mRNA platform to rapidly adapt our vaccine to emerging SARS-CoV-2 strains to provide protection as the virus evolves and regulatory guidance is updated. In May 2024, the U.S. Food and Drug Administration (FDA) granted approval for mRESVIA® (mRNA-1345), our mRNA vaccine against respiratory syncytial virus (RSV), to protect adults aged 60 and older from lower respiratory tract disease caused by RSV infection. This marks our second approved mRNA product and underscores our ongoing commitment to delivering solutions for patients by addressing global public health threats related to infectious diseases.

Previous wording

In April 2024, we entered a non-exclusive out-licensing agreement with a pharmaceutical company based in Japan for mRNA COVID-19-related intellectual property for the territory of Japan. We will receive an upfront payment of $50 million, which includes a $20 million prepayment creditable against future royalties. Additionally, we are entitled to low double-digit royalties on the net sales of the company’s COVID-19 product.

Current wording

In April 2024, we entered a non-exclusive out-licensing agreement with a pharmaceutical company based in Japan for mRNA COVID-19-related intellectual property for the territory of Japan. We received an upfront payment of $50 million, which included a $20 million prepayment creditable against future royalties. Additionally, we are entitled to low double-digit royalties on the net sales of the company’s COVID-19 product.

Previous wording

For the first quarter of 2024, we recognized net product sales of $167 million from sales of our COVID-19 vaccine, compared to $1.8 billion for the first quarter of 2023. Diluted loss per share was $(3.07) for the first quarter of 2024, compared to diluted earnings per share of $0.19 for the first quarter of 2023.

Current wording

For the second quarter of 2024, we recognized net product sales of $184 million from sales of our COVID-19 vaccine, compared to $293 million for the second quarter of 2023. Net loss per share was $(3.33) for the second quarter of 2024, compared to $(3.62) for the second quarter of 2023.

Previous wording

•In March 2024, we announced that our next-generation COVID-19 vaccine (mRNA-1283) had successfully met the primary endpoints of its Phase 3 clinical trial. The positive interim results from the NEXTCove Phase 3 trial showed that mRNA-1283 elicited a higher immune response against both the Omicron BA.4/BA.5 and original virus strains of SARS-CoV-2 compared to mRNA-1273.222. mRNA-1283 is designed to be refrigerator-stable and could pave the way for a combination vaccine against influenza and COVID-19 (mRNA-1083). mRNA-1283 is our fourth infectious disease vaccine program with positive Phase 3 data.

Current wording

Combination vaccine against influenza and COVID-19

Previous wording

•We and Merck have initiated three new randomized clinical studies in additional tumor types in 2024, including a Phase 2 adjuvant treatment in patients with renal cell carcinoma, or kidney cancer; a Phase 2 adjuvant treatment in patients with high-risk muscle-invasive bladder cancer; and a Phase 2/3 neoadjuvant and adjuvant treatment in patients with cutaneous squamous cell carcinoma, the second most common form of skin cancer.

Current wording

•We and Merck have initiated Phase 3 randomized clinical trials evaluating mRNA-4157 (V940) in combination with KEYTRUDA as an adjuvant treatment in patients with resected high-risk (Stage IIB-IV) melanoma and non-small cell lung cancer. Both trials are actively enrolling. In 2024, we and Merck also initiated three new randomized clinical studies in additional tumor types, including: a Phase 2 adjuvant treatment in patients with renal cell carcinoma, or kidney cancer; a Phase 2 adjuvant treatment in patients with high-risk muscle-invasive bladder cancer; and a Phase 2/3 neoadjuvant and adjuvant treatment in patients with cutaneous squamous cell carcinoma, the second most common form of skin cancer.

Previous wording

As of March 31, 2024, we had deferred revenue of $580 million associated with customer deposits received or billable under supply agreements, with the majority of our COVID-19 vaccine deliveries scheduled in 2024.

Current wording

As of June 30, 2024, we had deferred revenue of $740 million associated with customer deposits received or billable under supply agreements, with the majority of our COVID-19 vaccine deliveries scheduled in 2024.

Previous wording

Our net product sales for the first quarter of 2024 declined significantly as compared to the first quarter of 2023. This decline is indicative of the evolving nature of the endemic COVID-19 vaccine market, which has transitioned toward a seasonal commercial pattern. The sales in the first quarter reflect this greater seasonality, with reduced demand observed during this period. We anticipate that the demand for our COVID-19 vaccine will be higher in the fall and winter seasons across both hemispheres, as countries prepare for seasonal vaccination campaigns. For the full year of 2024, we expect the progression toward a seasonal commercial market to persist, resulting in further projected reductions in net product sales for our COVID-19 vaccine relative to 2023.

Current wording

Our net product sales for the first quarter and first half of 2024 declined significantly as compared to the same periods in 2023. This decline is indicative of the evolving nature of the endemic COVID-19 vaccine market, which has transitioned toward a seasonal commercial pattern. The sales in these periods reflect this greater seasonality, with reduced demand observed during the first half of the year. We anticipate that the demand for our COVID-19 vaccine will be higher in the fall and winter seasons across both hemispheres, as countries prepare for seasonal vaccination campaigns. For the full year of 2024, we expect the progression toward a seasonal commercial market to persist, resulting in further projected reductions in net product sales for our COVID-19 vaccine relative to 2023.

Previous wording

Total revenue decreased by $1.7 billion, or 91%, for the three months ended March 31, 2024, compared to the same period in 2023, mainly due to a reduction in net product sales of our COVID-19 vaccine.

Current wording

Total revenue decreased by $103 million and $1.8 billion, or 30% and 82%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, mainly due to a reduction in net product sales of our COVID-19 vaccine.

Previous wording

Net product sales decreased by $1.7 billion, or 91%, for the three months ended March 31, 2024, compared to the same period in 2023. This was primarily due to lower sales volumes in regions outside the United States, coupled with the market's transition to a seasonal commercial pattern for the COVID-19 vaccine market. Additionally, the decrease in sales volume was attributed to the fact that in the prior year period, we primarily delivered doses that had been deferred from 2022. This decline was partially offset by a higher average selling price, particularly in the United States, where commercial market sales commenced in the third quarter of 2023.

Current wording

Net product sales decreased by $109 million and $1.8 billion, or 37% and 83%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. This was primarily due to lower sales volumes in regions outside the United States, coupled with the market's transition to a seasonal commercial pattern for the COVID-19 vaccine market. Additionally, the decrease in sales volume was attributed to the fact that in the prior year period, we primarily delivered doses that had been deferred from 2022. This decline was partially offset by a higher average selling price in the United States, where commercial market sales commenced in the third quarter of 2023.

Previous wording

Other revenue decreased by $34 million, or 100%, for the three months ended March 31, 2024, compared to the same period in 2023, mainly due to a reduction in grant revenue under our agreement with BARDA for the development of our COVID-19 vaccine.

Current wording

Other revenue increased by $6 million, or 12%, and decreased by $28 million, or 33%, for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023. The increase for the three months ended was driven by the licensing and royalty revenue in the current period. The decrease for the six months ended was mainly due to a reduction in grant revenue under our agreement with BARDA for the development of our COVID-19 vaccine, partially offset by an increase in licensing and royalty revenue.

Previous wording

Cost of sales for the three months ended March 31, 2024 was $96 million, which include third-party royalties of $8 million, inventory write-downs of $30 million, and unutilized manufacturing capacity and winddown costs of $27 million. Cost of sales for the three months ended March 31, 2023 was $792 million, including third-party royalties of $86 million, inventory write-downs of $148 million, unutilized manufacturing capacity of $135 million, and losses on firm purchase commitments and related cancellation fees of $95 million. Please refer to Note 7 to our condensed consolidated financial statements for inventory related charges. These charges in 2024, other than royalties, were largely attributable to end-of-season demand adjustments and commitments related to manufacturing capacity.

Current wording

Cost of sales for the three months ended June 30, 2024 was $115 million, which included third-party royalties of $10 million, unutilized manufacturing capacity and wind-down costs of $55 million, and inventory write-downs of $14 million. Cost of sales for the six months ended June 30, 2024 was $211 million, which included third-party royalties of $18 million, unutilized manufacturing capacity and wind-down costs of $82 million, and inventory write-downs of $44 million, primarily related to our finished and semi-finished COVID-19 vaccine inventory. Cost of sales for the three months ended June 30, 2023 was $731 million, including third-party royalties of $12 million, inventory write-downs of $464 million, unutilized manufacturing capacity of $135 million, and losses on firm purchase commitments of $75 million. Cost of sales for the six months ended June 30, 2023 was $1.5 billion, including third-party royalties of $98 million, inventory write-downs of $612 million, unutilized manufacturing capacity of $270 million, and losses on firm purchase commitments and related cancellation fees of $117 million. Please refer to Note 7 to our condensed consolidated financial statements for inventory related charges. These charges in 2024, other than royalties, were largely attributable to end-of-season demand adjustments and commitments related to manufacturing capacity.

Previous wording

Cost of sales for the three months ended March 31, 2024 decreased by $696 million, or 88%, compared to the same period in 2023. Cost of sales as a percentage of net product sales for the three months ended March 31, 2024 was 58%, compared to 43% for the same period in 2023. The decrease in cost of sales in 2024 was primarily driven by lower sales volume coupled with reduced unutilized manufacturing capacity, inventory write-downs and losses on firm purchase commitments and related cancellation fees. Conversely, the increase in cost of sales as a percentage of net product sales in 2024 was mainly due to the low level of net product sales compared to the prior year, reflecting a decline in product demand and increased product seasonality.

Current wording

Cost of sales for the three months ended June 30, 2024 decreased by $616 million, or 84%, compared to the same period in 2023. Cost of sales as a percentage of net product sales for the three months ended June 30, 2024 was 62%, compared to 249% for the same period in 2023. Cost of sales for the six months ended June 30, 2024 decreased by $1.3 billion, or 86%, compared to the same period in 2023. Cost of sales as a percentage of net product sales for the six months ended June 30, 2024 was 60%, compared to 72% for the same period in 2023. The decrease in cost of sales for both the three and six month periods in 2024 was primarily driven by a lower sales volume, coupled with reduced inventory write-downs, unutilized manufacturing capacity, and losses on firm purchase commitments and related cancellation fees. The decrease in cost of sales as a percentage of net product sales for both the three and six month periods in 2024 was mainly driven by reduced costs, partially offset by the decreased sales volume, reflecting a decline in product demand and increased product seasonality.

Previous wording

Despite the increase in the cost of sales as a percentage of net product sales in the first quarter of 2024 compared to the same period in 2023, we anticipate that the full year cost of sales as a percentage of net product sales for 2024 will be lower than the 70% experienced in 2023. This expectation is based on projected improvements in our manufacturing efficiency and expected reductions in inventory write-downs. However, due to the strong seasonality of our business, we expect this percentage to be higher in the first half of the year than the second half of the year.

Current wording

We anticipate that the full year cost of sales as a percentage of net product sales for 2024 will be lower than the 70% experienced in 2023. This expectation is based on projected improvements in our manufacturing efficiency and expected reductions in inventory write-downs. However, due to the strong seasonality of our business, we expect this percentage to be higher in the first half of the year than the second half of the year.

Previous wording

Research and development expenses decreased by $68 million, or 6%, for the three months ended March 31, 2024, compared to the same period in 2023. The decrease was primarily attributable to a reduction in upfront license payments of $85 million. Additionally, there were decreases in manufacturing costs for clinical trial materials of $44 million and clinical trial expenses of $35 million, largely driven by lower clinical development spending on our COVID-19, RSV and seasonal flu programs. These reductions were partially offset by an increase in personnel-related costs and stock-based compensation of $54 million, mainly driven by an increased headcount in the research and development functions.

Current wording

Research and development expenses increased by $73 million, or 6%, for the three months ended June 30, 2024, compared to the same period in 2023. The increase was primarily attributable to the purchase of a priority review voucher, and an increase in personnel-related costs and stock-based compensation of $101 million. The increase was partially offset by a decrease in clinical trial expenses of $159 million. Research and development expenses for the six months ended June 30, 2024 remained consistent with the same period in 2023. This reflects a $155 million increase in personnel-related costs and stock-based compensation, and the purchase of a priority review voucher, offset by a $194 million reduction in clinical trial expenses and an $85 million reduction in upfront license payments. The increase in personnel-related costs and stock-based compensation for both periods was driven by higher headcount to support our continued research and development efforts. The decrease in clinical trial expenses for both periods was due to reduced spending on our COVID-19 and seasonal flu programs, aligning with our planned trial schedules.

Previous wording

We anticipate a modest reduction in research and development expenses in 2024 compared to 2023 levels. We continue to advance the development of variant-specific and next-generation COVID-19 vaccine candidates, and continue to develop our pipeline and advance our product candidates into later-stage development, in particular those in ongoing Phase 3 studies, including our RSV, seasonal flu, CMV and combination vaccine programs, as well as our INT program.

Current wording

We anticipate a modest reduction in research and development expenses in 2024 compared to 2023 levels. We continue to develop our pipeline and advance our product candidates into later-stage development, particularly our ongoing Phase 3 studies. These include our next-generation COVID-19, seasonal flu, CMV and combination vaccine programs, as well as our INT program.

Previous wording

Selling, general and administrative expenses decreased by $31 million, or 10%, for the three months ended March 31, 2024, compared to the same period in 2023. The decrease was mainly due to an $80 million reduction in consulting and outside services across all functions. This decrease was partially offset by an increase in personnel-related costs and stock-based compensation of $31 million, primarily driven by an expanded headcount in digital, medical affairs and commercial functions to support our digital and artificial intelligence initiatives and marketed products.

Current wording

Selling, general and administrative expenses decreased by $64 million, or 19%, for the three months ended June 30, 2024, compared to the same period in 2023, mainly due to a decrease in consulting and outside services across all functions of $65 million. Selling, general and administrative expenses decreased by $95 million, or 15%, for the six months ended June 30, 2024, compared to the same period in 2023. The decrease for the six months ended June 30, 2024 was mainly due to a $145 million reduction in consulting and outside services across all functions, partially offset by an increase in personnel-related costs and stock-based compensation of $54 million, primarily driven by an expanded headcount in digital, medical affairs and commercial functions to support our digital and artificial intelligence initiatives and marketed products. The decrease in both periods reflects cost discipline and efficiencies gained by reducing reliance on external consultants and bringing functions in-house.

Previous wording

Interest income increased by $11 million, or 10%, for the three months ended March 31, 2024, compared to the same period in 2023. The increase in interest income from our investments in marketable securities for the three month period in 2024 was mainly attributable to an overall higher interest rate environment, partially offset by lower average investment balances.

Current wording

For the three and six months ended June 30, 2024, interest income increased by $7 million and $18 million, or 7% and 8%, respectively, compared to the same periods in 2023. The increase in interest income from our investments in marketable securities for the three and six month periods in 2024 was mainly attributable to an overall higher interest rate environment, partially offset by lower average investment balances.

Previous wording

The following tables summarize other expense, net for the periods presented (in millions):

Current wording

The following tables summarize other (expense) income, net for the periods presented (in millions):

Previous wording

Total other expense, net decreased by $29 million, or 60%, for the three months ended March 31, 2024, compared to the same period in 2023. The decrease in other expense, net for the three months ended March 31, 2024 was primarily due to decreases in losses on available-for-sale debt securities and equity investments. Our interest expense is primarily related to our finance leases. Please refer to Note 10 to our condensed consolidated financial statements.

Current wording

For the three and six months ended June 30, 2024, total other expense, net increased by $41 million and $12 million, or 293% and 35%, respectively, compared to the same periods in 2023. The increase in other expense, net for the three and six months ended June 30, 2024 was primarily due to the increases in losses on equity investments and available-for-sale debt securities. Our interest expense is primarily related to our finance leases. Please refer to Note 10 to our condensed consolidated financial statements.

Previous wording

We had a tax provision of $10 million for the three months ended March 31, 2024. Provision for income taxes increased by $394 million, or 103%, for the three months ended March 31, 2024, compared to the same period in 2023, primarily due to certain of our foreign subsidiaries that have taxable income, while we incurred a net loss before income taxes on a consolidated basis. We cannot recognize tax benefits from the loss due to our global valuation allowance, which we continue to maintain against the majority of our global deferred tax assets. As a result of the valuation allowance, the effective tax rate for the three months ended March 31, 2024 is not comparable to the same period in prior year. Please refer to Note 13 to our condensed consolidated financial statements.

Current wording

Provision for income taxes increased by $369 million and $763 million, or 100% and 101%, for the three and six months ended June 30, 2024, compared to the same periods in 2023. The increase in both periods was primarily due to certain of our foreign subsidiaries that have taxable income, while we incurred a net loss before income taxes on a consolidated basis. We cannot recognize tax benefits from the loss due to our global valuation allowance, which we continue to maintain against the majority of our global deferred tax assets. As a result of the valuation allowance, the effective tax rates for the three and six months ended June 30, 2024 are not comparable to the same periods in the prior year. Please refer to Note 13 to our condensed consolidated financial statements.

Previous wording

Our cash, cash equivalents and investments are invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Investments, consisting primarily of government and corporate debt securities, are stated at fair value. Cash, cash equivalents and investments as of March 31, 2024 decreased by $1.1 billion, or 8%, compared to December 31, 2023. During the three months ended March 31, 2024, we had a net cash outflow from operating activities of $989 million and purchases of property and equipment of $196 million.

Current wording

Our cash, cash equivalents and investments are invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Investments, consisting primarily of government and corporate debt securities, are stated at fair value. Cash, cash equivalents and investments as of June 30, 2024 decreased by $2.5 billion, or 19%, compared to December 31, 2023. The decrease in cash, cash equivalents and investments was primarily due to a net cash outflow from operating activities of $2.3 billion and purchases of property and equipment of $378 million during the six months ended June 30, 2024.

Previous wording

Working capital, which is current assets less current liabilities, as of March 31, 2024 decreased by $90 million, or 1%, compared to December 31, 2023, primarily due to a decrease in accounts receivable of $755 million mainly due to timing of collections, and an increase in other current liabilities of $124 million driven by estimated reimbursements to wholesalers for wholesaler chargebacks. This was partially offset by a decrease in accrued liabilities of $402 million and a decrease in accounts payable of $337 million, both of which were driven by lower spend in manufacturing and development.

Current wording

Working capital, which is current assets less current liabilities, as of June 30, 2024 decreased by $12 million, compared to December 31, 2023, primarily due to a decrease in accounts receivable of $729 million, mainly due to timing of collections and decline in product sales. This was partially offset by a decrease in accrued liabilities of $465 million and a decrease in accounts payable of $241 million, both of which were driven by lower spend during the period.

Previous wording

Beginning in the third quarter of 2020, we entered into supply agreements with the U.S. Government, foreign governments and international organizations for the supply of our COVID-19 vaccine and received upfront deposits. In the third quarter of 2023, we commenced sales of our COVID-19 vaccine to the U.S. commercial market, in addition to continuing sales to foreign governments and international organizations. In the U.S., our COVID-19 vaccine is sold primarily to wholesalers and distributors, and to a lesser extent, directly to retailers and healthcare providers. Wholesalers and distributors typically do not make upfront payments to us. As of March 31, 2024, we had $580 million in deferred revenue related to customer deposits received or billable.

Current wording

Beginning in the third quarter of 2020, we entered into supply agreements with the U.S. Government, foreign governments and international organizations for the supply of our COVID-19 vaccine and received upfront deposits. In the third quarter of 2023, we commenced sales of our COVID-19 vaccine to the U.S. commercial market, in addition to continuing sales to foreign governments and international organizations. In the U.S., our COVID-19 vaccine is sold primarily to wholesalers and distributors, and to a lesser extent, directly to retailers and healthcare providers. Wholesalers and distributors typically do not make upfront payments to us. As of June 30, 2024, we had $740 million in deferred revenue related to customer deposits received or billable.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 was $989 million and consisted of net loss of $1.2 billion, a net change in assets and liabilities, net of acquisition of business, of $60 million and non-cash adjustments of $126 million. Non-cash items primarily included stock-based compensation of $101 million, and depreciation and amortization of $36 million. The net change in assets and liabilities was mainly due to a decrease in accounts receivable of $755 million driven by timing of collections, and an increase in other liabilities of $130 million mainly due to estimated reimbursements to wholesalers for wholesaler chargebacks, partially offset by a decrease in accrued liabilities of $398 million and a decrease in accounts payable of $303 million, driven by overall lower spending in manufacturing and development.

Current wording

Net cash used in operating activities for the six months ended June 30, 2024 was $2.3 billion and consisted of net loss of $2.5 billion, non-cash adjustments of $277 million and a net change in assets and liabilities of $86 million. Non-cash items primarily included stock-based compensation of $213 million, and depreciation and amortization of $77 million. The net change in assets and liabilities was mainly due to an increase in inventory of $197 million, driven by increased raw material purchases and manufacturing of COVID products, and decreases in accrued liabilities of $464 million and accounts payable of $199 million, driven by overall lower spend in the period. This was partially offset by a decrease in accounts receivable of $729 million driven by timing of collections and decline in product sales, and an increase in deferred revenue of $146 million due to customer deposits received in excess of revenue recognized.

Previous wording

Net operating cash flows increased by $236 million, or 19%, during the three months ended March 31, 2024, compared to the same period in 2023, primarily attributable to a change in deferred revenue of $786 million due to revenue recognized from deferred revenue in excess of customer deposits received, accounts receivable of $483 million related to timing of collections, deferred income taxes of $310 million driven by an increase in valuation allowance, and prepaid expenses and other assets of $215 million driven by a decrease in vendor prepayments and down payments, partially offset by a decrease in net income of $1.3 billion.

Current wording

Net cash used in operating activities increased by $123 million, or 6%, during the six months ended June 30, 2024, compared to the same period in 2023, primarily attributable to an increase in net loss of $1.2 billion, a change in inventory of $431 million, driven by less inventory write-downs, and a decrease in accounts receivable of $424 million related to timing of collections and decline in product sales, partially offset by a change in deferred revenue of $1.1 billion due to customer deposits received in excess of revenue recognized, and deferred income taxes of $530 million driven by an increase in valuation allowance.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2024 was $118 million, which primarily included proceeds from maturities and sales of marketable securities of $2.9 billion, partially offset by purchases of marketable securities of $2.5 billion, and purchases of property and equipment of $196 million.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2024 was $1.8 billion, which primarily included proceeds from maturities and sales of marketable securities of $5.5 billion, partially offset by purchases of marketable securities of $3.4 billion, and purchases of property and equipment of $378 million.

Previous wording

Net investing cash flows decreased by $1.9 billion, or 94%, during the three months ended March 31, 2024, compared to the same period in 2023, primarily due to an increase in purchases of marketable securities of $1.5 billion, and a decrease in proceeds from sale of marketable securities of $672 million.

Current wording

Net investing cash flows decreased by $2.2 billion, or 55%, during the six months ended June 30, 2024, compared to the same period in 2023, primarily due to an increase in purchases of marketable securities of $2.1 billion.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2024 was $14 million, primarily due to proceeds from issuance of common stock through equity plans of $15 million.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2024 was $48 million, primarily due to proceeds from issuance of common stock through equity plans of $47 million.

Previous wording

Net cash provided by financing activities increased by $556 million, or 103%, during the three months ended March 31, 2024, compared to the same period in 2023, mainly due to a decrease in repurchases of common stock.

Current wording

Net cash provided by financing activities increased by $1.3 billion, or 104%, during the six months ended June 30, 2024, compared to the same period in 2023, mainly due to a decrease in repurchases of common stock of $1.2 billion.

Previous wording

Our principal sources of funding as of March 31, 2024 consisted of cash and cash equivalents, investments, and cash we may generate from operations. We generated net income of $8.4 billion and $12.2 billion for the years ended in 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 also incurred a net loss of $1.2 billion for the three months ended March 31, 2024 and a net loss of $4.7 billion for the year ended in 2023. We have retained earnings of $12.4 billion as of March 31, 2024.

Current wording

Our principal sources of funding as of June 30, 2024 consisted of cash and cash equivalents, investments, and cash we may generate from operations. We generated net income of $8.4 billion and $12.2 billion for the years ended in 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 also incurred a net loss of $2.5 billion for the six months ended June 30, 2024 and a net loss of $4.7 billion for the year ended 2023. We have retained earnings of $11.2 billion as of June 30, 2024.

Previous wording

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 supply and manufacturing partners. Our ongoing work on our RSV, seasonal flu and CMV vaccine candidates, individualized neoantigen therapy, COVID-19 vaccines, including development of any new vaccines against variants of SARS-CoV-2, combination vaccines, late-stage clinical development, and buildout of global commercial, regulatory, sales and marketing infrastructure and manufacturing facilities will require significant cash outflows in future periods, most of which will not be reimbursed or otherwise paid for by our partners or collaborators. In addition, we have substantial facility, lease and purchase obligations (refer to Note 10 and Note 11 to our condensed consolidated financial statements). We have entered into various collaboration and licensing agreements, as well as a research and development funding arrangement with third parties. These arrangements collectively encompass the funding of specific research and development activities, with the distinction that under the research and development funding arrangement, we receive funding. However, for all these arrangements, we may be obligated to make potential future milestone and royalty payments.

Current wording

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 supply and manufacturing partners. Our ongoing work on our RSV, seasonal flu and CMV vaccine candidates, individualized neoantigen therapy, next generation COVID-19 vaccine, combination vaccines, late-stage clinical development, and buildout of global commercial, regulatory, sales and marketing infrastructure and manufacturing facilities will require significant cash outflows in future periods, most of which will not be reimbursed or otherwise paid for by our partners or collaborators. In addition, we have substantial facility, lease and purchase obligations (refer to Note 10 and Note 11 to our condensed consolidated financial statements). We have entered into various collaboration and licensing agreements, as well as a research and development funding arrangement with third parties. These arrangements collectively encompass the funding of specific research and development activities, with the distinction that under the research and development funding arrangement, we receive funding. However, for all these arrangements, we may be obligated to make potential future milestone and royalty payments.

Previous wording

We believe that our cash, cash equivalents, and investments as of March 31, 2024, together with cash expected to be generated from product sales, will be sufficient to enable us to fund our projected operations and capital expenditures through at least the next 12 months from the issuance of these financial statements included in this Form 10-Q. 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-19 vaccine in 2023, and this trend continued into the first quarter of 2024, reflecting the market's ongoing transition to a seasonal commercial pattern in the endemic COVID-19 vaccine market. 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.

Current wording

We believe that our cash, cash equivalents, and investments as of June 30, 2024, together with cash expected to be generated from product sales, will be sufficient to enable us to fund our projected operations and capital expenditures through at least the next 12 months from the issuance of these financial statements included in this Form 10-Q. 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-19 vaccine in 2023, and this trend continued into the first half of 2024, reflecting the market's ongoing transition to a seasonal commercial pattern in the endemic COVID-19 vaccine market. 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.