Moderna, Inc.

5. Collaboration Agreements and Research and Development Funding Arrangement

Merck –Individualized Neoantigen Therapy (Intismeran Autogene)

In June 2016, we entered into a Collaboration and License Agreement, which was subsequently amended in 2018, with Merck for the development and commercialization of individualized neoantigen therapy (INT), which has been assigned the generic name intismeran autogene.

In September 2022, Merck exercised its option for intismeran, including mRNA-4157, pursuant to the terms of the agreement and in October 2022 paid us an option exercise fee of $250 million. Following this exercise, the Merck Participation Term commenced. Pursuant to the agreement, we and Merck have agreed to collaborate on development and potential commercialization of intismeran, with costs and any profits or losses generally shared equally on a worldwide basis, subject to certain exceptions as outlined in the agreement. During the development phase, we are primarily responsible for process development and the manufacture of intismeran materials, while Merck generally leads clinical trials. We concluded that the collaboration arrangement under the Merck Participation Term is within the scope of ASC 808. For the three and nine months ended September 30, 2026, we recognized expenses, net of Merck's reimbursements, of $95 million and $293 million, respectively, related to the INT collaboration under the Merck Participation Term. For the three and nine months ended September 30, 2025, these expenses were$101 million and $304 million, respectively.

Additionally, for the three and nine months ended September 30, 2026, the net cost recovery for capital expenditures was$1 million and$3 million, respectively. For the three and nine months ended September 30, 2025, this amount was $1 million and $19 million, respectively. These amounts were applied to reduce the capitalized cost of the assets.

Recordati –Propionic Acidemia Therapeutic

In January 2026, we entered into a collaboration agreement with Recordati S.p.A. (Recordati) to advance the development and commercialization of our investigational propionic acidemia therapeutic, mRNA-3927. Under the terms of the agreement, we granted Recordati an exclusive, royalty-bearing license to develop and commercialize the licensed product (mRNA-3927) worldwide, we will perform and continue to lead clinical development activities through approval, and Recordati will lead global commercialization upon approval. The transaction closed on March 16, 2026, and we received a $50 million upfront payment in the second quarter of 2026. The upfront payment is being recognized as collaboration revenue over time. In addition, we are eligible to receive up to $110 million in development and regulatory milestones, as well as additional commercial and sales milestones and tiered royalties on net sales.

We have other collaborative and licensing arrangements that we do not consider to be individually significant to our business at this time. Pursuant to these agreements, we may be required to make upfront payments and payments upon achievement of various development, regulatory and commercial milestones, which in the aggregate could be significant. Future milestone payments, if any, will be reflected in our consolidated financial statements when the corresponding events have occurred. In addition, we may be required to pay significant royalties on future sales if products related to these arrangements are commercialized.

Development and Commercialization Funding Arrangement with Blackstone Life Sciences (Blackstone)

In March 2024, we entered into a development and commercialization funding arrangement with Blackstone, under which Blackstone has committed to providing up to $750 million in funding to us. This funding supports the development of our investigational mRNA-based influenza vaccine. Given the substantive transfer of financial risk to Blackstone, we account for this arrangement as an obligation to conduct research and development activities. The funding is recognized as a reduction to the expenses of our mRNA-based influenza program. This reduction is recognized proportionally as the related costs are incurred, based on an input method. Changes in estimated costs to complete the funded activities may result in cumulative adjustments to the amount of funding recognized in a reporting period. For the three and nine months ended September 30, 2026, we recorded expense reductions of $69 million and $143 million, respectively. For the three and nine months ended September 30, 2025, we recorded research and development expense reductions of $25 million and $274 million, respectively.

Following the first commercial sale of mFLUSIVA in September 2026, Blackstone became entitled to receive low single-digit percentage royalties and up to $750 million in sales milestone payments. These payments are based on net sales of our influenza and combination vaccines, with sales milestone payments contingent upon achieving specified cumulative net sales targets. No royalties or milestone payments were accrued as of September 30, 2026.

6. Financial Instruments

Cash and Cash Equivalents and Investments

The following tables summarize our cash, cash equivalents, and available-for-sale securities by significant investment category as of September 30, 2026 and December 31, 2025 (in millions):

The amortized cost and estimated fair value of available-for-sale securities by contractual maturity as of September 30, 2026 and December 31, 2025 were as follows (in millions):

In accordance with our investment policy, we place investments in investment grade securities with high credit quality issuers, and generally limit the amount of credit exposure to any one issuer. 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. Any impairment that is not credit related is recognized in other comprehensive loss, net of applicable taxes. A credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings. We didnot recognize any impairment charges related to available-for-sale securities for the three and nine months ended September 30, 2026 and 2025. We did not record any credit-related allowance for available-for-sale securities as of September 30, 2026 and December 31, 2025.

The following table summarizes the amount of gross unrealized losses and the estimated fair value for our available-for-sale securities in an unrealized loss position by the length of time the securities have been in an unrealized loss position as of September 30, 2026 and December 31, 2025 (in millions):

As of September 30, 2026 and December 31, 2025, we held 368 and 108 available-for-sale securities, respectively, out of our total investment portfolio that were in a continuous unrealized loss position. We neither intend to sell these investments, nor do we believe that we are more-likely-than-not to conclude we will have to sell them before recovery of their carrying values. We also believe that we will be able to collect both principal and interest amounts due to us at maturity.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

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).

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2026 and December 31, 2025 (in millions):

(1)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 expense, net, in our condensed consolidated statements of operations.

As of September 30, 2026 and December 31, 2025, we did not have non-financial assets or liabilities measured at fair value on a recurring basis and did not have any Level 3 financial assets or financial liabilities.

For the three and nine months ended September 30, 2026, we recognizedno net gain or loss and recognized a net loss of $2 million, respectively, on equity investments from changes in fair value of the securities. For the three and nine months ended September 30, 2025, we recognized a net gain of $3 million and a net loss of $5 million, respectively, on equity investments from changes in fair value of the securities.

Fair Value of Other Financial Instruments

We estimate the fair value of our term loan and convertible notes using Level 2 inputs. The fair value of the term loan approximates its carrying value as of September 30, 2026 and December 31, 2025, as the instrument bears interest at a variable rate that reflects current market rates. As of September 30, 2026, the estimated fair value of our convertible notes was approximately $3.6 billion, based on quoted market prices in an inactive market. See Note 11 for additional information.

7. Inventory

Inventory as of September 30, 2026 and December 31, 2025 consisted of the following (in millions):

(1)Consisted of raw materials with an anticipated consumption beyond one year. Inventory, non-current is included in other non-current assets in the condensed consolidated balance sheets.

Inventory write-downs as a result of excess, obsolescence, scrap or other reasons, and losses on firm purchase commitments are recorded as a component of cost of sales in our condensed consolidated statements of operations. For the three and nine months ended September 30, 2026, inventory write-downs were $54 million and $133 million, respectively. For the three and nine months ended September 30, 2025, inventory write-downs were $67 million and $147 million, respectively. For the three and nine months ended September 30, 2026, there wereno losses on firm purchase commitments. For the three and nine months ended September 30, 2025, losses on firm purchase commitments were $7 million and $24 million, respectively.

Inventory write-downs were mainly related to inventory in excess of expected demand, shelf-life expiration and other inventory adjustments. Losses on firm purchase commitments were primarily related to excess raw material purchase commitments that will expire before the anticipated consumption of those raw materials.

As of September 30, 2026 and December 31, 2025, we had inventory on hand of $382 million and $267 million, respectively, inclusive of inventory for our COVID, influenza and RSV vaccines. Our raw materials and work-in-progress inventory have variable shelf lives. We expect that the majority of this inventory will be consumed over the next three years. The shelf life of Spikevax isnine totwelve months. mNEXSPIKE has a shelf life oftwelve months. mFLUSIVA has a shelf life oftwelve months. The shelf life of mRESVIA iseighteen months.

8. Property, Plant and Equipment, Net

Property, plant and equipment, net, as of September 30, 2026 and December 31, 2025 consisted of the following (in millions):

Depreciation and amortization expense related to property, plant and equipment for the three and nine months ended September 30, 2026 was$61 millionand $173 million, respectively. Depreciation and amortization expense related to property, plant and equipment for the three and nine months ended September 30, 2025 was $51 million and $145 million, resp ectively.

9. Other Balance Sheet Components

Accounts Receivable, net

Accounts receivable, net, as of September 30, 2026 and December 31, 2025 consisted of the following (in millions):

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets, as of September 30, 2026 and December 31, 2025 consisted of the following (in millions):

Other Non-Current Assets

Other non-current assets, as of September 30, 2026 and December 31, 2025 consisted of the following (in millions):

(1)Includes a $60 million intangible asset related to a license recognized in connection with the settlement agreement with Arbutus and Genevant. See Note 12 for additional details.

(2)Consisted of raw materials with an anticipated consumption beyond one year.

Accrued Liabilities

Accrued liabilities, as of September 30, 2026 and December 31, 2025 consisted of the following (in millions):

(1)Related to losses that are expected to arise from firm, non-cancellable, commitments for future raw material purchases (Note 7).

Other Current Liabilities

Other current liabilities, as of September 30, 2026 and December 31, 2025 consisted of the following (in millions):

Other Non-Current Liabilities

Other non-current liabilities, as of September 30, 2026 and December 31, 2025 consisted of the following (in millions):

Deferred Revenue

The following table summarizes the activities in deferred revenue for thenine months ended September 30, 2026 (inmillions):

10. Leases

We have entered into various long-term, non-cancelable lease arrangements for our facilities and equipment, expiring at various times through 2039. Certain of these arrangements have free rent periods or escalating rent payment provisions. We recognize lease costs under such arrangements on a straight-line basis over the life of the lease. We lease various parcels of land, office, lab, and manufacturing spaces across the globe for our business operations.

Our primary leased campus is our Moderna Science Center (MSC), located in Cambridge, which serves as our headquarters. The MSC, comprising approximately 462,000 square feet, includes our principal executive office and additional office and laboratory spaces. The MSC lease commenced in the third quarter of 2023 and has a term of 15 years, with options fortwo additional seven-year extensions.

Operating and financing lease right-of-use assets and lease liabilities as of September 30, 2026 and December 31, 2025 were as follows (in millions):

(1)These assets are real estate related assets, which include land, office, manufacturing, and laboratory spaces.

(2)Net of accumulated amortization.

(3)These assets are related to contract manufacturing service agreements.

(4)Included in property, plant and equipment in the condensed consolidated balance sheets, net of accumulated depreciation.

(5)Included in other current liabilities in the condensed consolidated balance sheets.

Future minimum lease payments under our non-cancelable lease agreements as of September 30, 2026, were as follows (in millions):

11. Credit Agreement and Convertible Notes

Credit Agreement

In November 2025, we entered into a Credit and Guaranty Agreement (the Credit Agreement) with lenders led by Ares Capital Corporation, as administrative agent. The Credit Agreement provides for a senior secured term loan facility with aggregate term loan commitments of $1.5 billion, consisting of a $600 million initial term loan, which was funded at closing, and $900 million of delayed draw term loan commitments. The initial term loan matures on November 24, 2030. The delayed draw term loan commitments consist of (1) a $400 million delayed draw term loan facility (DDTL-1), which is available, subject to customary conditions, through November 24, 2027, and (2) a $500 million delayed draw term loan facility (DDTL-2), which is available, subject to customary conditions and the achievement of specified regulatory approval milestones for certain product candidates, through November 24, 2028.

Borrowings under the Credit Agreement bear interest at a variable rate equal to, at our option, (i) Term SOFR plus a margin of 5.50% or (ii) a base rate plus a margin of 4.50%. The base rate is calculated as the highest of (a) the Wall Street Journal prime rate, (b) the federal funds rate plus one half of one percent and (c) Term SOFR plusone percent. We are also required to pay commitment fees on the undrawn portions of DDTL-1 and DDTL-2. The interest rate applicable to the initial term loan was approximately 9.23% and 9.38% as of September 30, 2026 and December 31, 2025, respectively.

The obligations under the Credit Agreement are guaranteed by certain of our subsidiaries and are secured by a first-priority lien on substantially all of our assets, in each case subject to customary exceptions and limitations. The Credit Agreement is subject to compliance with customary representations and warranties, affirmative covenants, restrictive covenants and events of default. The restrictive covenants, subject to specified limitations and exceptions, limit, among other things, our ability to incur additional indebtedness and liens, make certain investments, engage in certain fundamental changes, dispose of assets and make restricted payments. Events of default under the Credit Agreement include, among others, nonpayment of principal, interest or other amounts when due, failure to comply with covenants (subject to applicable notice and cure periods), breaches of certain representations and warranties, the occurrence of certain significant adverse events and certain insolvency-related events. The Credit Agreement also includes a financial covenant requiring us to maintain minimum cash and cash equivalents (as defined in the Credit Agreement, which primarily consist of our cash, cash equivalents, and available-for-sale securities) as of the last business day of each week of at least $500 million, increasing to $750 million if more than $1.0 billion is drawn under the Credit Agreement. The financial covenant is not required to be tested at any time that the trailing 30-day average market capitalization of the Company exceeds $5.0 billion and is subject to a customary equity cure. As of September 30, 2026 and December 31, 2025, we were in compliance with the applicable terms and covenants under the Credit Agreement.

As of September 30, 2026 and December 31, 2025, the initial term loan had an outstanding principal balance of $600 million and a carrying amount of $591 million and $590 million, respectively, net of unamortized original issue discount and debt issuance costs. The carrying amount was classified as long-term debt in our condensed consolidated balance sheet. No amounts had been drawn under DDTL-1 or DDTL-2. The principal amount of $600 million is due in full at maturity, and no principal payments are required prior to that date.

Convertible Notes

On September 1, 2026, we issued $3.0 billion aggregate principal amount of 0.00% Convertible Senior Notes due 2032 (the 2032 Notes), which included the exercise in full of the initial purchasers’ option to purchase an additional $400 million aggregate principal amount of the 2032 Notes. The 2032 Notes are our senior unsecured obligations and mature on March 1, 2032, unless earlier converted, redeemed or repurchased. The 2032 Notes do not bear regular interest, and the principal amount of the 2032 Notes does not accrete. Special interest may accrue under certain circumstances as provided in the indenture governing the 2032 Notes.

Prior to the close of business on the business day immediately preceding December 1, 2031, holders may convert all or any portion of the 2032 Notes only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending December 31, 2026, if the last reported sale price of our common stock is at least 150% of the then-current conversion price for at least 20 trading days during the 30 consecutive trading day period ending on, and including, the last trading day of the immediately preceding calendar quarter; (ii) during thefive business day period following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of the 2032 Notes for each trading day during such period is less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on each such trading day; (iii) if we call the 2032 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date, with respect to the 2032 Notes called for redemption; or (iv) upon the occurrence of certain specified corporate events. On or after December 1, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of the 2032 Notes at any time.

Upon conversion, we may elect to settle the 2032 Notes in cash, shares of our common stock, or a combination of cash and shares of our common stock. The initial conversion rate is 4.7487 shares of our common stock per $1,000 principal amount of the 2032 Notes, equivalent to an initial conversion price of approximately $210.58 per share. The initial conversion price represents a premium of approximately 47.5% over the closing price of our common stock on August 27, 2026. Based on the initial conversion rate, the 2032 Notes are initially convertible into approximately 14 million shares of our common stock and, in certain limited circumstances, may be convertible into a maximum of approximately 21 million shares. The conversion rate is subject to adjustment upon the occurrence of certain events. In addition, following certain corporate events occurring prior to maturity or if we deliver a notice of redemption, we will, in certain circumstances, increase the conversion rate for holders who elect to convert their 2032 Notes in connection with such corporate event or during the related redemption period.

We may redeem for cash all or any portion of the 2032 Notes, at our option, on or after September 6, 2029 and before the 21st scheduled trading day immediately preceding the maturity date if the last reported sale price of our common stock has been at least 130% of the then-current conversion price for at least 20 trading days during any 30 consecutive trading day period, including the last trading day of such period, ending on, and including, the trading day immediately preceding the date on which we provide the related notice of redemption. The redemption price is equal to 100% of the principal amount of the 2032 Notes to be redeemed, plus accrued and unpaid special interest, if any. If we undergo a fundamental change, as defined in the indenture, holders may, subject to certain conditions, require us to repurchase for cash all or any portion of their 2032 Notes at a price equal to 100% of the principal amount of the 2032 Notes to be repurchased, plus accrued and unpaid special interest, if any. The conditions allowing holders to convert the 2032 Notes were not met as of September 30, 2026.

We received net proceeds of approximately $3.0 billion from the issuance of the 2032 Notes, net of issuance costs. The 2032 Notes are accounted for in their entirety as a liability, as the embedded conversion features are indexed to our common stock and meet the criteria for the own-equity scope exception from derivative accounting. Debt issuance costs of approximately $43 million associated with the 2032 Notes are being amortized to interest expense over the contractual term of the 2032 Notes using the effective interest method. As of September 30, 2026, the net carrying amount of the 2032 Notes was $3.0 billion, net of unamortized debt issuance costs of $42 million, and was classified as a long-term liability on our condensed consolidated balance sheet.

Capped Call Transactions

On August 27, 2026, in connection with the pricing of the 2032 Notes, and on August 28, 2026, in connection with the exercise in full of the initial purchasers’ option to purchase additional 2032 Notes, we entered into privately negotiated capped call transactions (the Capped Call Transactions) with certain financial institutions. We paid an aggregate premium of $329 million for the Capped Call Transactions using a portion of the net proceeds from the issuance of the 2032 Notes. The Capped Call Transactions are call options on our common stock and initially cover, subject to customary adjustments, approximately 14 million shares of our common stock, corresponding to the number of shares initially underlying the 2032 Notes. The Capped Call Transactions have an initial strike price of approximately $210.58 per share, which corresponds to the initial conversion price of the 2032 Notes, and an initial cap price of approximately $392.62 per share, representing a premium of approximately 175% over the closing price of our common stock on August 27, 2026. The strike price, cap price and number of shares underlying the Capped Call Transactions are subject to adjustment under certain circumstances.

The Capped Call Transactions are expected generally to reduce potential dilution to our common stock upon conversion of the 2032 Notes and/or offset potential cash payments we may be required to make in excess of the principal amount of converted 2032 Notes, in each case to the extent the market price of our common stock, determined in accordance with the terms of the Capped Call Transactions, exceeds the strike price, with such reduction in potential dilution and/or offset of cash payments subject to the cap price.

The Capped Call Transactions are separate transactions from the 2032 Notes and are indexed to our common stock and qualify for equity classification. Accordingly, we recorded the $329 million purchase price as a reduction to additional paid-in capital on our condensed consolidated balance sheet, and the Capped Call Transactions are not subsequently remeasured.

12. Commitments and Contingencies

Legal Proceedings

We are a party to various legal proceedings and claims. Accruals are recognized for legal matters when a loss is both probable and reasonably estimable. As of September 30, 2026, no material contingent liabilities have been recognized. If a material loss is reasonably possible and we can estimate the amount or range of the loss, we disclose such information. Unless otherwise noted, either the outcome of these matters is not expected to be material, or the potential loss cannot be reasonably estimated.

From time to time, we may be a party to litigation, arbitration, or other legal proceedings in the course of our business. The outcome of such matters is inherently uncertain and often involves significant judgment in assessing risk and estimating potential exposure. While we do not currently expect any pending proceedings to have a material adverse effect on our financial position, results of operations, or cash flows, there can be no assurance that future developments will not have a material impact.

On March 3, 2026, we entered into a settlement agreement with Arbutus Biopharma Corporation (Arbutus) and Genevant Sciences GmbH (Genevant, and with Arbutus, Arbutus/Genevant) resolving all litigation worldwide, including between the parties in the U.S. District Court for the District of Delaware. The settlement resolves all worldwide Arbutus/Genevant litigation related to Spikevax and mRESVIA and provides certainty going forward for our full infectious disease portfolio, including mNEXSPIKE, mCOMBRIAX, mFLUSIVA and our future vaccine pipeline, with no future royalties owed. Under the terms of the agreement, we agreed to make a lump sum payment of $950 million, which we paid in July 2026. In the three months ended March 31, 2026, we recorded $876 million in cost of sales and capitalized $74 million as an intangible asset on the settlement date, representing the estimated value attributed to a license to certain intellectual property rights, which is being amortized on a straight-line basis over an estimated useful life of approximately three years. As of September 30, 2026, the carrying value of the intangible asset was $60 million. Consistent with the terms of the settlement agreement, we have appealed the District Court’s decision related to 28 U.S.C. § 1498 to the Federal Circuit Court of Appeals and could be required to make an additional payment of up to $1.3 billion depending on the outcome of the appeal. As of September 30, 2026, no accrual has been recorded for this amount as a loss is not considered probable.

The following summarizes our other significant legal proceedings and matters outstanding as of September 30, 2026.

We brought patent-infringement actions against Pfizer Inc. (Pfizer), BioNTech SE (BioNTech) and related entities in the U.S., Germany, the Netherlands, the UK, Ireland and Belgium concerning our mRNA platform technology and disease-specific vaccine designs. Pfizer and BioNTech commenced actions or asserted defenses seeking to revoke our patents in these jurisdictions. In September 2026, the Technical Board of Appeal of the European Patent Office revoked our European Patent No. 3 590 949 in all contracting states, including Germany, the Netherlands, the UK, Ireland, and Belgium. Following this decision, the related national proceedings in Belgium, Ireland, and the Netherlands have been dismissed. Proceedings in Germany and the UK remain pending awaiting the written decision of the Technical Board of Appeal.

We have filed a complaint against Pfizer, BioNTech, and certain of their affiliates in the Hamburg Local Division of the Unified Patent Court (UPC) asserting a European Patent concerning modified mRNA vaccines formulated in lipid nanoparticles.

Northwestern University has filed a complaint against us in the U.S. District Court for the District of Delaware asserting U.S. patents concerning lipid nanoparticle technology.

Bayer CropSciences LLC, Monsanto Company, and Monsanto Technology, LLC have filed a complaint against us in the U.S. District Court for the District of Delaware asserting a U.S. patent directed to methods of modifying gene sequences.

mNG Bio, LLC has filed a complaint against us in the U.S District Court for the District of Massachusetts asserting a U.S. patent directed to a yellow-green fluorescent protein.

BioNTech SE has filed a complaint against us in the U.S. District Court for the District of Delaware asserting a U.S. patent directed to modified mRNA compositions encoding a spike protein fragment.

CureVac SE and CureVac Manufacturing GmbH have filed a complaint against us in the U.S. District Court for the District of Delaware asserting U.S. patents directed to RNA production methods and compositions with RNA encoding modified SARS-CoV-2 spike protein.

CureVac Manufacturing GmbH has filed a complaint against us and certain of our affiliates in the Hague Local Division of the UPC asserting a European patent related to mRNA production and purification methods.

CureVac SE has filed complaints against certain of our affiliates in Spain and Switzerland asserting a European patent related to mRNA compositions with increased guanine and cytosine content.

Translate Bio, Inc., Translate Bio MA, Inc., Sanofi Vaccines US, Inc., and VaxServe, Inc. (all subsidiaries of Sanofi SA) have filed a complaint against us in the U.S. District Court for the District of New Jersey asserting U.S. patents related to compositions and methods for mRNA delivery.

Shareholder class action and shareholder derivative complaints were brought against us in the U.S. District Court for the District of Massachusetts related to statements about our RSV vaccine (mRNA-1345). The class action litigation was dismissed with prejudice and the decision is subject to appeal.

Indemnification Obligations

As permitted under Delaware law, we indemnify our officers, directors, and employees for certain events, occurrences while the officer, or director is, or was, serving at our request in such capacity. The term of the indemnification is for the officer’s or director’s lifetime.

We have standard indemnification arrangements in our leases for laboratory and office space that require us to indemnify the landlord against any liability for injury, loss, accident, or damage from any claims, actions, proceedings, or costs resulting from certain acts, breaches, violations, or non-performance under our leases.

We enter into indemnification provisions under our agreements with counterparties in the ordinary course of business, typically with business partners, contractors, clinical sites and customers. Under these provisions, we generally indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of our activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited.

Through the three and nine months ended September 30, 2026 and the year ended December 31, 2025, we hadnot experienced any material losses related to these indemnification obligations, andno material claims were outstanding. We do not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, andno related reserves were established.

Licenses to Patented Technology

We have patent license agreements with Cellscript, LLC and its affiliate, mRNA RiboTherapeutics, Inc., and the National Institute of Allergy and Infectious Diseases (NIAID), an Institute of the National Institutes of Health (NIH). Under these agreements, we are required to pay royalties and certain milestone payments. For further information on our licensing and royalty payments, please refer to our 2025 Form 10-K under the heading “Business—Intellectual Property—In-licensed intellectual property” and Note 12 to our consolidated financial statements contained therein.

In January 2025, we entered into a non-exclusive patent license agreement with NIAID to license certain patent rights related to the development of mRNA-based vaccines for the prevention or treatment of RSV infection. Upon execution of the agreement, we made a total payment of $10 million, which was capitalized as an intangible asset and is amortized to cost of sales on a straight-line basis over the estimated useful life of the licensed patents. In addition, we are obligated to pay low single-digit royalties on future net sales of licensed products.

For the three and nine months ended September 30, 2026, we recognized $65 million and $971 million, respectively, of royalty expenses associated with our product sales, including amortization of certain intangible assets. The royalty expense recognized for the three and nine months ended September 30, 2026 included $6 million and $890 million, respectively, related to the litigation settlement with Arbutus and Genevant. For the three and nine months ended September 30, 2025, we recognized $43 million and $54 million, respectively, of royalty expenses. These royalty expenses were recorded to cost of sales in our condensed consolidated statements of operations.

Additionally, we have other in-license agreements with third parties which require us to make future development, regulatory and commercial milestone payments and sales-based royalties for specified products associated with the agreements. The achievement of these milestones have not yet occurred as of September 30, 2026.

13. Stock-Based Compensation and Share Repurchase Programs

Stock-Based Compensation

The following table presents the components and classification of stock-based compensation expense for the three and nine months ended September 30, 2026 and 2025 as follows (in millions):

As of September 30, 2026, there was $722 million of total unrecognized compensation cost related to unvested stock-based compensation with respect to options, RSUs and PSUs granted. That cost is expected to be recognized over a weighted-average period of 2.6 years as of September 30, 2026.

Share Repurchase Programs

As of September 30, 2026, $1.7 billion of our Board of Directors’ authorization for repurchases of our common stock (the 2022 Repurchase Programs) remains outstanding, with no expiration date. There wereno shares repurchased during the three and nine months ended September 30, 2026 or 2025.

14. Income Taxes

The following table summarizes our income tax expense for the periods presented (in millions, except for percentages):

The effective tax rate for the three months ended September 30, 2026 was lower than the statutory rate, primarily due to our expected full-year loss position and the continued maintenance of our global valuation allowance, which limits our ability to recognize tax benefits associated with the loss. For the nine months ended September 30, 2026, the effective tax rate was higher than the statutory rate, primarily because certain of our foreign subsidiaries generated taxable income while we incurred a consolidated pre-tax loss and maintained a global valuation allowance that limits our ability to recognize tax benefits from the loss. The effective tax rate for the three and nine months ended September 30, 2026 continued to be significantly impacted by the maintenance of our global valuation allowance. For additional details regarding our deferred tax assets and the policies governing our valuation allowance, please refer to Note 14 to our consolidated financial statements in our 2025 Form 10-K.

We periodically reassess the need for valuation allowances on our deferred tax assets, considering both positive and negative evidence to evaluate whether it is more likely than not that all or a portion of such assets will not be realized. Significant management judgment is required in assessing the realizability of our deferred tax assets. In the event that actual results differ from our estimates, we adjust our estimates in future periods and we may need to modify our valuation allowance, which could materially impact our financial position and results of operations.

We file income tax returns in the U.S. and various state, local and foreign jurisdictions. The income tax returns of all material taxing jurisdictions remain open to tax examination for all tax years since our date of incorporation in those jurisdictions. As of September 30, 2026, we are under audit in various U.S. and foreign jurisdictions. No adjustments to our tax positions have been proposed at this time.

15. Net Earnings (Loss) per Share

The computation of basic earnings (loss) per share (EPS) is based on the weighted-average number of our common shares outstanding. The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and potential dilutive common shares during the period as determined by using the treasury stock method for equity awards and the if-converted method for our convertible notes.

Basic and diluted EPS for the three and nine months ended September 30, 2026 and 2025 were calculated as follows (in millions, except per share data):