Moderna Inc

(Unaudited)

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 four franchises: respiratory virus vaccines, latent and other virus vaccines, oncology therapeutics and rare disease therapeutics.

Our approved COVID vaccine (mRNA-1273) is our first commercial product and is marketed under the name Spikevax®. mRNA-1273 was first developed to target 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) approved mRESVIA® (mRNA-1345), our mRNA respiratory syncytial virus (RSV) vaccine, to protect adults aged 60 years and older from lower respiratory tract disease caused by RSV infection. This marks our second approved product developed using our mRNA platform.

We have a diverse and extensive development pipeline of 31 development candidates across our 41 development programs, of which 38 are in clinical studies currently.

2. Summary of Basis of Presentation and Recent Accounting Standards

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements that accompany these notes have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2024 (2024 Form 10-K). 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 Update (ASU) of the Financial Accounting Standards Board (FASB). This report should be read in conjunction with the audited consolidated financial statements in our 2024 Form 10-K.

The condensed consolidated financial statements include Moderna, Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Except for (1) the revision to the estimated useful lives of certain manufacturing equipment (refer to "Use of Estimates" below), and (2) updates to our approach for estimating the expected term of stock options and the removal of peer company data in determining expected volatility for stock-based compensation (refer to Note 12), the significant accounting policies used in the preparation of these condensed consolidated financial statements for the three months ended March 31, 2025 are consistent with those described in our 2024 Form 10-K. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the operating results to be expected for the full fiscal year or future operating periods. We anticipate seasonal fluctuations in demand for our COVID and RSV vaccines, with higher sales expected during the fall and winter seasons.

Use of Estimates

We have made estimates and judgments affecting the amounts reported in our condensed 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 revenues 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.

Effective January 1, 2025, we revised the estimated useful life of certain manufacturing equipment from five years to a range offive totwelve years. This change followed an assessment completed in connection with the expansion of our internal manufacturing capabilities and reflects the expected economic utility of the equipment. The change was accounted for prospectively, with carrying values depreciated over their revised remaining useful lives. As a result, depreciation expense and net loss for the three months ended March 31, 2025 decreased by an immaterial amount.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) and other comprehensive income/loss for the period. Other comprehensive income/loss consists of unrealized gains/losses on our investments, derivatives designated as hedging instruments, foreign currency translation, and pension and postretirement obligation adjustments. Total comprehensive income (loss) for all periods presented has been disclosed in the condensed consolidated statements of comprehensive loss.

The components of accumulated other comprehensive income (loss) for the three months ended March 31, 2025 were as follows (in millions):

Restricted Cash

We include our restricted cash balance in the cash, cash equivalents and restricted cash reconciliation of operating, investing and financing activities in the condensed consolidated statements of cash flows.

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in millions):

(1)Included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

(2)Included in other non-current assets in the condensed consolidated balance sheets.

Recently Issued Accounting Standards

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by us as of the specified effective date. Except as noted below, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our condensed consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The standard requires entities to disclose federal, state, and foreign income taxes in their rate reconciliation tables and elaborate on reconciling items that exceed a quantitative threshold. Additionally, it requires an annual disclosure of income taxes paid, net of refunds, categorized by jurisdiction based on a quantitative threshold. The ASU is effective on a prospective basis for fiscal years beginning after December 15, 2024. Early adoption is permitted. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently assessing the impact that this new accounting standard will have on our consolidated financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires entities to disclose, on an annual and interim basis, disaggregated information in the footnotes related to certain expense categories included in income statement line items. Specifically, entities are expected to provide tabular disclosures for prescribed categories such as inventory purchases, employee compensation, depreciation, and intangible asset amortization for each relevant expense caption. The standard also requires disclosure of total selling expenses and a definition of those expenses in annual filings. Any remaining amounts not quantitatively disclosed are expected to be described qualitatively. This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption permitted, and the standard may be applied on a prospective or retrospective basis. We are currently assessing the impact that this new accounting standard will have on our consolidated financial statement disclosures.

3. Net Product Sales

Net product sales by customer geographic location were as follows (in millions):

Net product sales by product were as follows (in millions):

As of March 31, 2025, we havetwo commercial products authorized for use, our COVID vaccine (mRNA-1273) and our RSV vaccine (mRNA-1345). The RSV vaccine was approved by the FDA in May 2024 for adults aged 60 years and older.

We sell our COVID vaccine to the commercial market as well as to foreign governments and international organizations. We launched commercial sales of our RSV vaccine in the third quarter of 2024. In the U.S., our COVID and RSV vaccines are sold 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. 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):

The following table summarizes the activities related to product sales provision recorded as accrued liabilities for the three months ended March 31, 2025(in millions):

Prior to the launch of our commercial market sales, we sold our COVID vaccine primarily to the U.S. Government, foreign governments and international organizations. The agreements and related amendments with these entities generally do not include variable consideration, such as discounts, rebates or returns. Certain of these agreements entitle us to upfront deposits for our COVID vaccine supply, initially recorded as deferred revenue.

As of March 31, 2025 and December 31, 2024, we had deferred revenue of $154 million and $188 million, respectively, related to customer deposits for our COVID vaccine. We expect $96 million of our deferred revenue related to customer deposits as of March 31, 2025 to be realized in less than one year. Timing of product delivery and manufacturing, and receipt of marketing approval for the applicable COVID vaccine will determine the period in which product sales are recognized.

4. Other Revenue

The following table summarizes other revenue for the periods presented (in millions):

Grant Revenue

In April 2020, we entered into an agreement with the Biomedical Advanced Research and Development Authority (BARDA), a division of the Administration for Strategic Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services (HHS), for an award of up to $483 million to accelerate development of our original COVID vaccine, mRNA-1273. The agreement has been subsequently amended to provide for additional commitments to support various late-stage clinical development efforts of our original COVID vaccine, including a 30,000 participant Phase 3 study, pediatric clinical trials, adolescent clinical trials and pharmacovigilance studies. The maximum award from BARDA, inclusive of all amendments, was approximately $1.8 billion. All contract options have been exercised. As of March 31, 2025, the remaining available funding, net of revenue earned was $63 million.

In June 2024, we were awarded up to $176 million through the Rapid Response Partnership Vehicle (RRPV), funded by BARDA, to accelerate the development of mRNA-based pandemic influenza vaccines. The project award will support the late-stage development of an mRNA-based vaccine to enable the licensure of a pre-pandemic vaccine against the H5 influenza virus. This subtype of the influenza virus causes a highly infectious and severe disease in birds known as avian influenza and poses a risk of spillover into the human population. The agreement also includes additional options to prepare for and accelerate responses to future public health threats. In January 2025, we were awarded up to $590 million through the RRPV, funded by BARDA, to support the continued late-stage development and licensure of mRNA-based pre-pandemic influenza vaccines, including expanded clinical studies for up to five additional subtypes of pandemic influenza. This funding builds on the scope of the June 2024 funding related to the H5 influenza virus and expands the program to cover additional influenza subtypes. Revenue recognized related to this agreement was immaterial as of March 31, 2025.

Licensing and Royalty Revenue

In April 2024, we entered a non-exclusive out-licensing agreement with a pharmaceutical company based in Japan for mRNA COVID-related intellectual property for the territory of Japan. Under the terms of the agreement, we received an upfront payment of $50 million, which included a $20 million prepayment creditable against future royalties. Additionally, we are entitled to receive low double-digit royalties on the net sales of the company’s COVID product. Upon execution of the agreement, we recognized $30 million of the upfront payment as other revenue in our condensed consolidated statements of operations. The remaining $20 million was recorded as deferred revenue in our condensed consolidated balance sheets and recognized as royalty revenue as the underlying sales occurred. As of March 31, 2025, the full $20 million has been amortized and recognized pursuant to the terms of the agreement.

Other Revenue

We have entered into long-term strategic agreements with certain 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.