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Moderna(NASDAQ: MRNA)
Q3 2024 Earnings Call
Nov 07, 2024, 8:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good day, and thank you for standing by. Welcome to the Moderna third quarter 2024 conference call. [Operator instructions] Please be advised today's conference is being recorded. I would now like to hand the conference over to the speaker today, Lavina Talukdar.
Please go ahead.
Lavina Talukdar -- Senior Vice President, Head Investor Relations
Thank you, Kevin. Good morning, everyone, and thank you for joining us on today's call to discuss Moderna's third quarter 2024 financial results and business updates. You can access the press release issued this morning, as well as the slides that we'll be reviewing by going to the investors section of our website. On today's call are Stéphane Bancel, our chief executive officer; Steven Cole, our president; and Jamey Mock, our chief financial officer.
Before we begin, please note that this conference call will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see Slide 2 of the accompanying presentation and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. I will now turn the call over to Stephane.
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Stephane V. Bancel -- Chief Executive Officer
Thank you, Lavina. Good morning or good afternoon, everyone. Thank you for joining us. I will start with a review of our business in the third quarter.
Jamey will present our financial results and outlook. Stephen will review our clinical programs. I will then come back and share our key priorities before Q&A. We delivered $1.9 billion of revenue in the third quarter.
Our net income was $13 million -- we ended the quarter with cash and investments of $9.2 billion. As you know, for over a year now, we have been working to improve productivity in the company. In the third quarter of 2024 compared to the first quarter of 2024, we reduced operating expenses by $500 million across cost of sales, RD and SG&A. This figure excludes $1.4 billion of resizing charge in the first quarter of 2023.
I would like to thank our teams who have been working hard to achieve these cost savings and we'll continue our money to improve our cost efficiencies. This year, the COVID market benefited from U.S. regulatory approval that was 19 days earlier than in 2023. This backlog was available across all segments of the U.S.
healthcare system. For manufacturing and logistics teams were able to do the number of buses delivered to customers compared to the first week of last year's core vaccine season. Now, turning to what we have seen so far this is for Baskin in the U.S. retail market.
The graphs on Slide 6 of shops in harmed in the retail channels as measured by IQVIA, which includes retail pharmacies and long-term care. As you can see the graph on the left, the earlier approval of a vaccine this year has helped to push total vaccine doses above where they were last year at this point in the season. The graph on the right shows weekly doses, which, as you can see in the past few weeks have started to decline. While we do not know the shape of this curve until the end of the season, we are encouraged that the Covid market is starting to prove to be a sizable and durable long term market.
Moderna has 40% share of retail shops in arms season. Turning to Slide 7. We pay dividend to look at accusation trends from last year to inform our understanding of where there are additional opportunities to grow the COVID market. There are three major delivery channels for respiratory vaccines in the U.S.
Their retail pharmacies integrated delivery networks or ID, which basically serve hospitals and doctors who are part of these networks and the third group, government programs and other. As you can see, the retail channel compromised 73% of total U.S. market for Coriander last year in 2023. COVID vaccines have been overall given to pharmacy settings with such smaller distribution in urban channel.
If now we look at flu in the flu market, however, the distribution by channel is different with migrate expertise on IDN and government. Since COVID presents a much greater help burden than flew in the United States. We remain convinced that decreasing the vaccination rate of COVID related to flu provides a significant opportunity to improve public especially in the IDS segment and government and other segments. Therefore, as we execute on COVID strategy, we see the opportunity to drive the COVID vaccination rate closer to flu over time, especially in the underprivileged channels.
With additional support for increased COVID vaccination rates over time, is a combination of COVID flu vaccine, which Stephen will discuss shortly. Let's now turn to what Moderna is going to be vaccination rates. The first objective of our airport is to educate healthcare providers on the importance of COVID as a public at trend. Its negative impact as a much greater cost of CVs and over respiratory viruses and the opportunity to improve public health by following vaccine recommendation.
As you know, in the 2023, 2024 season, there were three times more hospitalizations of COVID than flu. Secondly, we're going direct to consumer to emphasize the benefit of getting vaccinated and our most recent campaign highlights the danger of a long COVID and the importance of vaccination to minimize the risk of it. Additionally, public health authorities, including the CDC, recognize the importance of vaccination, which is reflected by the most recent ACIP recommendation for additional COVID doses for immunocompromised people and those 65 and older in the spring of 2025. Moving on to RFP.
Modern third quarter restart $10 million. This was below expectations going into 2024. Unfortunately, the timing of approval and recommendation by the CDC and FDA, resulted in us missing most of contracting season. Additionally, the substantial buildup of inventory in the channel by competitors prior to our launch has had a negative impact on our sales.
Looking to 2025, we believe that we'll be able to participate from the beginning of the contracting season in the U.S. We also filed for approval of a broader MECA label that will allow to address the 18- to 59-year-old high-risk population. Additionally, we see the potential for market expansion if regulators recommend revaccination. And finally, we are now starting to receive approval outside the U.S., and we expect to have sales in those markets in 2025.
I am delighted to welcome Abbas Hussain to the board of directors. Abbas has strong commercial background, which makes it a great addition to our board. He has more than 25 years of commercial experience, more recently, as CFO of Vifor. And before that, as chief commercial officer of GSK.
Abbas is an ideal board member to guide Moderna forward as we continue to advance our growth portfolio of products toward commercialization in the next few years. We very much look forward to working with Abbas in the years ahead. Finally, I'm very pleased to announce the expansion of Moderna executive committee, expanding the responsibilities of two current members of the team and adding two new members to the team to help us ensure we execute our strategy and deliver on our mission to patients. First, Stephen will expand his role to include oversight of a full commercial organization, which was previously divided.
At Moderna, Stephen is responsible for strategy across the full lifecycle the company research and development and medical and commercial. Joining Moderna's executive committee are Rose Loughlin and Jacqueline Miller. Rose is being promoted to executive vice president, research. Jackie is being promote to our chief medical officer development organization.
The promotion of Jackie and rose to the executive committee is a special makeup for the company. This is the first time in our history that we have promoted internal talent onto the executive committee. It is a testament to both of these remarkable colleagues who have each spend year facing and critical areas of the company. And also reflect our commitment to grow and develop our internal talent at Moderna.
Tracey Franklin, our chief human resource officer will also expand our becoming the chief people and digital technology officer. The expansion of our world emphasize a lighter integration of people, culture and digital innovation across the business. As the team works to scale up our business processes, they asked a question of how we should do work, how should we be organized between people and digital technologies, being off the shelf software AI solutions, including our own machine learning algorithm or GPT enterprise and/or robotic solution. I would have to thank Stephen and Tracey for their new expanded role and for the partnership over many years and many years looking forward and to congratulate Rose and Jackie for being part of the company executive committee.
With this, let me turn to Jamey.
Jamey Mock -- Chief Financial Officer
Thanks, Stephane, and hello, everyone. Today, I will provide an overview of our financial results for the third quarter and share our outlook for the remainder of 2024. Let's start by reviewing our commercial performance, which you can follow on Slide 14. The -- for the third quarter of 2024, our net product sales were $1.8 billion, bringing year-to-date product sales to $2.2 billion.
We also had approximately $100 million in year-to-date other revenues from grants, collaboration, licensing and royalties, which are not included in the figures on this slide. $1.2 billion of our 3Q 2024 product sales were from the U.S. market, where we experienced an earlier launch to the 2024, 2025 season. While our 3Q results exceeded expectations., This was mainly due to sales timing between the third and fourth quarter, supported by receiving FDA approval of our updated COVID-19 vaccine, three weeks earlier than last year.
Also, included in our U.S. sales of $1.2 billion is a provision release of approximately $140 million, primarily driven by lower product returns from the 2023, 2024 season compared to our previous estimate. Additionally, we commenced our speed vaccine sales in Q3. While initial RFP sales were limited at $10 million, we believe there is potential for long-term growth as we work to capture a larger market share over time.
International sales of $0.6 billion were in line with our expectations but lower compared to the same period in 2023, when sales benefited from the fulfillment of orders deferred from 2022. For our full year 2024 outlook, we are reaffirming our product sales estimate of $3 billion to $3.5 billion, which implies the 4Q product sales range of $0.8 billion to $1.3 billion. We expect our U.S. 4Q product sales to be between $200 million and $500 million.
The range is driven by the following three key variables. Our Spikevax market share, which is currently tracking to approximately 40% in retail. At this time, it's too early to call our share in IDMs and with the government. Next, vaccination rates.
Our range assumes a market size, which has COVID vaccinations flat to down 10% versus the prior year. Finally, our performance in and the ultimate size of the RSV market in 2024. To summarize, if our retail market share remains constant at 40% and the U.S. market finishes this season down 10% compared to last year, and there is no uptick in RSV sales, we expect to be on the low end of the sales range.
We expect our international 4Q product sales to be between $600 million and $800 million. We have a tighter range on our international sales as most of these sales are for contracted volume and confirmed orders. The final international sales amount will be dependent upon revenue recognition timing and our performance in a few specific markets. Moving to Slide 15, I will talk about our 3Q financial results in more detail.
Net product sales for Q3 were $1.8 trillion, as I just discussed on the prior page. Our cost of sales for 3Q 2024 was $514 million, representing 28% of net product sales for the quarter. This was a 77% year-over-year decline in our cost of sales from $2.2 billion in Q3 2023. As a reminder, last year, we undertook a strategic initiative to restructure our manufacturing footprint and recorded $1.4 billion of charges in 3Q 2023 from inventory write-downs, so wind down costs and cancellation fees.
Excluding the $1.4 billion charge, cost of sales still declined by 38% year over year as we continue to make progress driving additional productivity improvements in our manufacturing operations. R&D expenses were $1.1 billion in Q3 2024, reflecting a 2% year-over-year decline from $1.2 billion last year. We purchased a priority review voucher during the third quarter of 2024, which is included in our Q3 results. Excluding the PRV purchase, we had a strong year over year spending declines for research, development and clinical manufacturing as we continue to drive cost efficiencies across all areas of the organization.
SG&A expenses for Q3 2024 were $281 million, representing a 36% year-over-year reduction. This decline reflects our focus on driving cost efficiency and making targeted investments that continue to strengthen our overall productivity. I will provide further details in the following slides. We recognized an income tax of $8 million for the third quarter, a significant reduction from the $1.7 billion in the same period last year.
The decrease was largely attributable to the establishment of a $1.7 billion valuation allowance on deferred tax assets in Q3 2023. The valuation allowance has remained in place into its initial recognition and continues to impact our tax expense. Our net income for the period was $13 million, a notable improvement from the net loss of $3.6 billion recorded in Q3 2023. Earnings per share for the quarter were $0.03, and compared to a loss of $9.53 per share in the same period last year.
We ended the quarter with cash and investments totaling $9.2 billion, down from $10.8 billion at the end of Q2. primarily due to ongoing research and development expenses and operating activities. Moving to Slide 16. I want to provide additional detail on the cost reductions we are driving across the company.
as discussed on previous calls, as a platform company, we are building a unique operating model. And over the last few years, we have invested purposefully into people, processes and technologies to build foundational capabilities that will allow us to scale efficiently. We continue to see these efficiency gains in our 2024 results. As mentioned on the previous slide, we reduced 3Q SG&A expenses by 36% year over year.
We had year-over-year reductions across all areas of our SG&A categories, commercial, medical and G&A functional spending. Major drivers were from reductions in purchased services and external consultants as we better leverage digital technology and AI. Year-to-date, our SG&A spending is down 24% year over year. While we continue to drive productivity improvements, we are also committed to increasing COVID-19 vaccination rates with investments in HCP education and consumer ad campaigns.
-- as well as increasing our COVID-19 and RSV market share in competitive markets. Therefore, we don't expect as large a year-over-year decline in 4Q SG&A spending versus the prior year. For the full year, we expect SG&A to be down approximately 20% to $1.2 billion, which is reflected in our financial framework update on the next slide. Turning to that 2024 financial framework on Slide 17.
Our net product sales guidance remains at $3 billion to $3.5 billion. As reviewed earlier, there are a handful of factors we are monitoring as the season progresses. For cost of sales, we are narrowing our guidance to 40% to 45% of product sales as a result of the continued manufacturing productivity improvements we are driving in the company. For R&D, we are lowering our full year estimate of $4.6 billion to $4.7 million from our previous guidance of $4.8 billion.
The reduction is due to cost savings from productivity improvements, as well as clinical study timing. For SG&A, we continue to expect full year expenses to be approximately $1.2 billion, down from $1.5 billion in 2023, a decrease of approximately 20% year over year. We continue to expect taxes to be negligible in 2024, and we are updating our capital expenditures outlook to approximately $1.2 billion which reflects the purchase of our Norwood campus from our landlord for approximately $400 million, partially offset by approximately $100 million of other capex reductions. The purchase of this highly strategic asset allows us full control to expand and build out the campus to drive future productivity and innovation.
We anticipate this transaction will close in December. We continue to expect ending 2024 with approximately $9 billion of cash and investments. The additional cash outlay for purchasing our Norwood campus will be offset by reductions in our cost of sales, R&D and other capital expenditures. Based on our 3Q actual product sales of $1.8 billion, we have strong visibility into our expected cash collection timing from our customers in 4Q.
With that, I will now hand the call over to Stephen.
Stephen Hoge -- President
Thank you, Jamey, and good morning or good afternoon, everyone. Today, I'll do a quick review of our pipeline. At our R&D event in September, we discussed our focus on 10 product approvals over the next three years. Today, I will briefly summarize the status of those programs.
Starting with our respiratory vaccines portfolio. For our next-generation COVID vaccine MRNA-123a, we are pleased with the positive Phase III safety, immunogenicity and vaccine efficacy data we presented at R&D day. including a 13.5% higher vaccine efficacy compared to spike and participants aged 65 and older in that study. As previously shared, we intend to file mRNA-1283 for approval in 2024, and we'll use a priority review vote.
For our RSV vaccine, mRNA-1345, we also shared positive safety and immunogenicity data from our Phase III trial in participants 18 to 59 years old who are at high risk from RSV. We are also using a priority view voucher for this program, which we intend to submit this year. We also shared positive Phase III data from our combination flu COVID vaccine, mRNA-1083. We intend to file for approval in 2024, subject to ongoing discussions with FDA.
We've decided not to use a priority review voucher for this program given the timing of submission and the potential launch relative to the respiratory virus season in 2025. We will announce PDUFA dates for these programs if and when they are confirmed by the FDA. Moving now to our stand-alone flu program, MRNA1010. We have initiated and substantially enrolled the first season of our Phase III vaccine efficacy study.
As a reminder, this Phase III study is funded within our project financing agreement with Blackstone Life Sciences. -- shows the study design for that Phase III stand-alone Flux. This is a randomized, observer-blind active controlled study for mRNA-1010 against the standard dose comparator. It is designed to be enrolled over two seasons, but the study has the possibility to declare early success after a single season.
Now, turning to our non-respiratory portfolio, starting with our latent and other virus vaccines. For our CMV vaccine, we continue to expect that we will approve the 81 cases required for the interim analysis in our Phase III study by the end of this year. Following the accrual of these cases, the Data Safety and Monitoring Board we will conduct a statistical analysis, should they recommend unblinding at the interim analysis, we will share those results. For norovirus, I'm happy to announce that we are rapidly enrolling our Phase III trial.
In a moment, I will take you through the design of that norovirus Phase III study. In oncology, we and our partner, Mark have initiated a Phase III trial evaluating adjuvant INT or mRNA-4157 in combination with KEYTRUDA after neoadjuvant KEYTRUDA and chemotherapy in patients with certain types of resected non-small cell lung cancer. This is the second Phase III trial for INT in non-small cell lung cancer and is targeting patients who may not respond to neoadjuvant therapy alone. I will also review this study designed in the upcoming slides.
For our rare disease therapeutics, we intend to begin to generate pivotal trial data for our PA program in 2024 and -- and for M&A, we have an agreement with FDA on our pivotal trial design. We now expect to start that study in the first half of 2025. On Slide 22 is the design of our Phase III study for our norovirus vaccine candidate. As a reminder, norovirus is a gastrointestinal disease with high unmet need and no approved vaccines on the market.
The Phase III study is designed to test the efficacy, safety and immunogenicity of our vaccine in 25,000 adults age 18 and older. It is randomized 1:1 observer-blind and placebo control. Turning now to the trial design for our second Phase III study in non-small cell lung cancer for IMT in collaboration with Merck, which complements the Phase III INTERPAT-002 trial. This Phase III study called INTrPath-009, we enrolled more than 1,200 patients with Stage I to IIb non-small cell lung cancer without an EGFR mutation and who are able to undergo surgery.
These patients will receive neoadjuvant therapy of KEYTRUDA plus chemotherapy followed by surgery. The study will randomize approximately 680 patients, who have not achieved a pathologic complete response into two arms, combination of INT plus KEYTRUDA or KEYTRUDA plus placebo. The primary endpoint for the study is disease-free survival and the secondary endpoints include distant metastasis-free survival and overall survival. With that, I will now turn the call back over to Stephane.
Stephane V. Bancel -- Chief Executive Officer
Thank you, Stephen and Jamey. During R&D Day in September, we shared the company priorities. Priority one, to drive sales of approved products, Spivak and Morelia. Priority two focused on our last step plan where we believe we can have up to 10 product approvals over the next three years and which will be drivers of sales growth.
Priority free to deliver cost efficiency across the business and slower pace of R&D investments, reducing annualized expenses by $1.1 billion, starting in 2027. Our first priority baseload and Media which we believe are the foundation of our respiratory vaccine portfolio. We will continue to work with all market channels to maximize buyback availability. We are focusing on marketing and medical education to try to drive the core pagination rate closer to that of through ovens.
Internationally, we plan to bring manufacturing plants online in the U.K., in Canada and in Australia in 2025 have start to fulfill multiyear contracts in those countries. And we are a full season of R&D contracting in the U.S. and other countries in 2025, we expect to increase our sales and market share. We are focused on delevering up to 10 product approvals over the next three years, which we believe with our sales growth, in fact, the next wave of investment.
For any of these programs, we have here some milestones. For CMV, we expect to trigger the analysis for Phase III vaccine efficacy study by the end of this year. We're looking forward to those results. For PFMA, we plan to initiate pivotal studies on norovirus and flu Phase III vaccine efficacy studies are now underway.
Finally, we intend to file three products in 2024 on COVID vaccine for RSV vaccine for high risk 18 to 59 year old and the combination COVID flu vaccine, which is subject to ongoing discussions with the U.S. FDA. We will continue to focus on improving efficiency pacific and SDA expenses flat to down in 2025. And as demonstrated in the quarter, we are making progress on our cost saving initiatives already.
By 2027, we expect to decrease annual R&D expenses by $1.1 billion. On the cost of sales, we continued our efficiency and we expect to achieve operating leverage that we are lining framework we sold previously. We have two products approved that help protect people every day. We have the largest FX pipeline for any company, and we'll continue to focus on the greatest possible impact to people through a modern medicine.
While there is work to be done to meet our execution targets and confident that our team will be able to achieve our goals. I continue to be excited about the potential we have to deliver for patients. The actions we have -- we are taking to help people is becoming reality. With this, operator, I will be happy to take questions.
Questions & Answers:
Operator
[Operator instructions] Our first question comes from Salveen Richter with Goldman Sachs. Your line is open.
Salveen Richter -- Analyst
Thank you. Good morning. Two questions for me. One is, can you speak to the source of the rest of world revenue generated in the third quarter and expected in fourth quarter with regard to which countries are contributing here and these contracts that should you expect them to recur in 2025 and -- and then separately on CMV, you talked about the DSMB, you'll share the results of the DSMB recommends unblinding.
Can you speak more to that as to whether we will actually get interim data provided to us or we're going to have to wait for the full analysis here? Thank you.
Stephen Hoge -- President
Sure. Thanks for the question, Salveen. I'll take the first one in terms of rest of world revenue. So without getting into too much specifics, I think you know we're establishing a presence in the United Kingdom, in Canada, in Australia, we announced an order in Brazil -- and so that's been -- the balance will be shipped either in the third quarter and the fourth quarter.
And when we look at the fourth quarter of the $600 million on the low end, the large majority of that is contracted with those countries and others, but I just wanted to name a few. As we look to 2025, I think we mentioned at R&D Day, that there will be a decline in some of those countries. And then, it will then uptick our anticipation is that it will uptick in 2026 based upon the contracts that we have in certain countries. So that's a little bit on the rest of world split.
Jamey Mock -- Chief Financial Officer
And on the CMV question. So if the DSMB recommends unblinding to sponsor at the first term analysis to your question, that would be because we met the criteria for vaccine efficacy. And obviously, we would share those results if we receive them. There is a chance that the DSMB will not work to an unwinding, which would mean perhaps that we did not make statistical significance in that first interim analysis can be going then to the final analysis, which could happen place quickly.
And depending upon the conditions of that communication and the timing of that final analysis, we may or may not be communicating right then about the fact that we're waiting for that final analysis. But we would, in any event, if the DSMB recommended unblinding share those results.
Operator
Thank you. Our next question comes from Ellie Merle with UBS. Your line is open.
Ellie Merle -- Analyst
Hey, guys. Thanks for taking the question. Just another one on how to think about the Axios COVID revenues. In the past, you've talked about some contracts with some countries for guaranteed purchases like fume throughout the end of the decade.
Maybe can you just, in broad strokes, characterize the size of some of these contracts that you have outstanding ex U.S.? And I guess what's essentially guaranteed from a revenue perspective here in terms of some of these ex-U.S. contracts sort of if you have a sense of maybe like what the minimum sales ex US could be and certain years going forward based on that? And then, just a second follow-up on CMD. I think you alluded to this in the last answer, but maybe just -- in terms of the like rate of accruals, I guess what's your latest expectation in terms of the time frame between when you will accrue the number of events to trigger the interim versus the number of events to trigger the final analysis, just the timing between those sales.
Jamey Mock -- Chief Financial Officer
OK. Yes, sure. So I'll take the first part, Eli. So in terms of the contract that we have with some of these countries, we're not going to disclose the specifics.
But what I will say is that as we add products over time, you can imagine that the amount of the minimum purchase commitment will grow over time. So that's why, as I just mentioned in my prior response, that it will drop in 2025 and then start to grow in 2026. But I don't think we're going to disclose anything more than that.
Stephen Hoge -- President
On the question on CMV and the timing of Katakura it is coming quite steadily right now. And in fact, -- we do have a bit of a backlog of case confirmation that we are working through. There's multiple steps that have to go with multiple testing to validate case. And so, we actually Obviously, we don't control the rate of case accrual, but we do expect that if we are going to that final analysis, it won't be a very long period of time between and actually could happen quite quickly.
Ellie Merle -- Analyst
Great. Thanks.
Operator
Our next question comes from Gena Wang with Barclays. Your line is open.
Gena Wang -- Analyst
Thank you. I have two questions. One is regarding the commercial questions. If we calculate $1.2 billion revenue and accumulate $19 million U.S.
doses, is the calculation like per dose as a net price is the right way to think about it? And then, regarding the reserve return, could you provide a final reserve return from last winter season? And what is your reserve return so far for this winter season? And quickly regarding the flu combo -- flu COVID combo, not using priority voucher, maybe give us a little bit more rationale this? And then, will all three that you submit this year? How many of these will make it for 2025 winter season?
Jamey Mock -- Chief Financial Officer
Yes, Gena, maybe I'll take the first question. So on the U.S. pricing, the $19 million, I think, is the total market you might be referring to for COVID vaccinations, not specific to Moderna. That said, the pricing that you're talking about, we won't specifically disclose, but it's not that far off.
Stephen Hoge -- President
On the pipeline questions, thank you for both. So first on the priority review voucher for the Flu COVID combo. Given where we are in terms of timing of this year and relative timing of the contracting season for flu back -- we no longer think it makes sense to use a priority review voucher to try and accelerate that process because ultimately, we believe we would miss the contracting season. For that reason, we'll hold back that and use it for a different product in the future.
As far as the submissions, as we confirm today, we are expecting two -- the other two submissions to go forward with priority review vouchers. And given the time lines, you can understand that we think that means approval next year is possible and can happen prior to the season. However, we do not include any revenue from either the 18 to 59 RSV SBLA or 1,283 in our 2025 guidance or expectations. And so, if we were able to deliver those with those priority of us and approvals, we still wouldn't include any revenue that would be an upside.
Sorry, could you repeat the question, Gena, I missed the sales return part.
Gena Wang -- Analyst
Yes, sure. Reserve return is -- could you provide the final reserve return from last winter season? Because I know you initially booked over $500 million and you need to adjust it to see the final numbers. So if you could provide that final numbers? And what is your reserve return assumption so far for this winter season?
Jamey Mock -- Chief Financial Officer
Yes. So as I mentioned in my prepared remarks that we released in the quarter about $140 million, primarily driven from reducing reserves being lower than our prior estimate. So that $500 million-plus went down to, let's say, $400 million for the prior season. So we learned from that and continue to forecast what the anticipated product returns reserve is for this season, and we will continue to monitor it as we look at vaccination rates throughout the entire quarter.
and what we project into the first quarter of next year.
Gena Wang -- Analyst
Thank you.
Operator
Our next question comes from Michael Yee with Jefferies. Your line is open.
Michael Yee -- Analyst
Thank you. Two questions, not 10. But on the combo, I know that you say you're in discussions with the FDA. Can you just clarify what are the different factors that are contributing to why you have maybe lack of confidence on filing or I guess not certainty on filing the combo, for example, would there be an infection study that has to be run.
I think it's a little unclear to us on the combo. And then, on I think the market had anticipated this was going to be a big market. However, obviously, there is a lot of dynamics going on there. Can you maybe comment on whether you think there will be a change to Dish market? And what would give you confidence that you're going to actually be a player here, given you've already given -- given your current position now and where your guidance is for 2025.
Stephen Hoge -- President
Thank you for both questions. So first on the -- I'll take the combo and I think Stefan will take the question on RSV. So first, we are in discussions with the ADA data for 1083. -- as you'll remember, came sort of middle of this year.
And so, we've only more recently had the opportunities to be sharing that and engage in discussions about what would be in the BLA for accelerated approval of 103 based on immunogenicity results. I would not comment on those discussions back and forth. We continue to work closely with the agency to understand what they would like to see in that. We continue to believe, as we said today, that we will be submitting for approval this year.
although those conversations are ongoing, and we'll update as they proceed forward. The decision not to use the priority review voucher became one about the timing of that approval and ultimately, our view that would -- we would miss the contracting season for influenza, and therefore, it didn't make sense to do that. But by withdrawing the priority review voucher, we also allow for a more fulsome time for review, which is also obviously the benefit of ourselves and the agency.
Stephane V. Bancel -- Chief Executive Officer
And on the RSV, Mike, I think there's a few things. As you know, the market has been much lower than last year, anticipated Obviously, the new CDC guidelines that came out in the June time frame impacted that. herpes we are hearing from customers is very focused on making sure people get covered through vaccination right now. So I think it's going to be quite interesting to see what happens in Q1, potentially and thus the shape of the curve of the look different.
-- than what we saw in the previous year. So that's to be seen. The other piece is because through contracting and because of what happened last year and there's no comforting happened before the CDC guideline. There's quite a lot of volume in the channel where both other retailers themselves and in wholesalers.
And so, of course, with a much lower market and a large inventory in the customers and both what seller and with the pharmacy sale margin is taking quite some time to go through that inventory. And so, we think that there's an interesting question about the market dynamic in terms of timing, again, Q1 being a more important timing for going forward. It's a question to be seen. Of course, we expect that more data accumulated CDT we call it to review and look at what is the right guideline.
So that's public leaders to decide and being able to totally contract bid and at the same time for a full season, we believe it's going to have an impact in the U.S. and please I mentioned as in my remarks, is outside the U.S., which is as you know, we have no sales outside the U.S. We are getting approvals, and they're going to continue to happen in the months to come. So we believe '25 and beyond should also help out.
Michael Yee -- Analyst
Thank you.
Operator
Our next question comes from Tyler Van Buren with TD Cowen. Your line is open.
Tyler Van Buren -- Analyst
Hey, guys. Good morning. Thanks very much for taking the question. So I wanted to ask about U.S.
COVID vaccine sales. So they were roughly flat quarter over quarter between Q3 and Q4 last year. But the vaccine sales guidance for Q4 this year assumes a decline as much as 60% to 80% quarter over quarter if RSV sales remain low and my math is correct. So is there a significant shift occurring this year due to the vaccines being available earlier in patients getting vaccinated earlier that you expect to be the dynamic moving forward? Or could this guidance be conservative? I just asked because it's a pretty dramatic change in the cadence of U.S.
sales. So any additional color would be appreciated.
Stephane V. Bancel -- Chief Executive Officer
Thank you. So about the U.S. market, I think what is important first is to look at the different channels because they are very different, As we share the data that we have is the huge data for retail and long-term care facilities. As you see, earlier start season today a little bit ahead.
But if you look at the weekly scripts, we are coming down the peak we hear from retailers that they are working very hard in terms of taxation campaign ahead of giving and the plan ahead of Christmas between Thanksgiving and Christmas. But that is to be seen what happens, what is a shareholder curve. And then, there is the IDN networks. As I said in my remarks, we have been working with IDN networks to increase the COVID vaccination rate versus last year.
We don't have a lot of visibility because those campaigns started later, most of them early October, we as used the retailer starting in August. -- with some of them starting pretty strong in August and early September. And then, the government data for which we have no visibility, we only get orders when the orders coming. So it's still early in the season.
the shape is clearly different from last year in retail. We are hoping that we will work over retailers and our work in might calf with differentiated last year. And then, and government. So we will have to see and we've got the importing to learn about this market, but we believe it still remains sizable.
And clearly report, we see that many of people who want the COVID vaccination.
Jamey Mock -- Chief Financial Officer
Yes. And maybe I would just add that, remember, when we sell product, that is not tied to vaccination. So when you look at the decline from the third quarter to the fourth quarter, -- we were -- we had an early approval to Stephan's going to -- and we were better ready to ship more within the third quarter. So that's what I think you see on a year-over-year basis, what's happening here.
Operator
Thank you. Our next question comes from Terence Flynn with Morgan Stanley. Your line is open.
Terence Flynn -- Analyst
Hi. Thanks for taking the question. I was just wondering on the INT program, obviously, you're continuing to accelerate the clinical program here with the new Phase III in lung. But can you just give us an update on the manufacturing facility in Massachusetts and if that's still on track for completion by year-end.
And then, if there's going to be any bridging work required by the FDA for approval or validation.
Stephane V. Bancel -- Chief Executive Officer
Terrence, yes. So the team continues to do a great job in the plant. -- with all the progress totally on schedule. And so, given what we shall at any day in terms of timing with the plant will no longer be a critical path to approval but we're keeping the team working really out, and they're making great progress.
So we're very pleased with that.
Stephen Hoge -- President
Yes. And on the question of bridging, once the plant is operational, we'll transition our clinical work to that plant as well. And so, effectively, all of the programs will include -- many of the programs may include, I should say, that data to the bridging will be done in in stream.
Operator
Thank you. Our next question comes from Evan Wang with Guggenheim Securities. Your line is open.
Evan Wang -- Guggenheim Partners -- Analyst
Hey, guys. Thanks. Two for me. First, on the election results? Just wondering given the pending change in administration, what barriers are in place from policy or legislative standpoint that would meaningfully limit treats to current use the vaccine in the U.S.
what steps are you doing to reassure confidence there and protect against potential increase in legal liabilities. And one on RSV, some competitors are describing how data are now sufficient for expansion in international revenues. Do you agree there? And what gives you confidence in competitiveness ex U.S. specifically.
Stephane V. Bancel -- Chief Executive Officer
Good morning. So thank you for the questions. So on your first question, as you know, our mission of the company is to bring innovative medicines to help people have prevent disease or with disease since the company funding, we've always worked very closely we've gone leader and public areas around the world, including, of course, the U.S. And as you know, we work very collaboratively with both truck this first term.
And so, we're going to continue to do that. Our mission is to really ensure we help people and we increase people's help, which is totally align with what the administration is going to work on. On RSV, outside the U.S., as you know, the market have approved the product at very different times. Outside the U.S., you have a very similar process than you have in the U.S.
because once you get approval, need to get for recommendation, we see CDC which in some markets happen at different times. Then you have pricing negotiation, which, as you know, are quite different outside the U.S. and the U.S. Sometimes you might be so all season because of the timing of those different elements, As you know in the U.S., there's no pricing negotiation where you can lose some time months or quarters.
So I think the solar ramp outside the U.S. is reflecting but recommendations that sometimes tend to be for all the population by 70 and above on 75 ago. And just the timing of all the mechanics to come together and then again, you could be a season by a few weeks and you just met the season. So those are the dynamics fasting.
We continue to believe that RSV causes hospitalization and hurt people and the RV vaccines are going to be important to prevent people being hospitalized, especially if you think in some of the tailwinds, we have an aging population in Europe. We have an aging population in Asia -- and so I continue to believe that over time, the market outside the U.S. would be an important market. But there's a lot of education to do move at the consumer level, a lot of consumers don't even know what AC until recently.
So we don't know as of today, same with some doctors. So there's just a lot of work to do. But the virus is hurting people. So there is a need there, and we collectively need to work with public health leaders to prevent hospitalization.
Everybody knows, especially in government that are single payers that vaccines are most probably the best ROI that you get in in terms of healthcare dollars. And the best way to not have hospitals with too many people is to get prevention.
Operator
Thank you. Our next question comes from Edward Tentholf with Piper Sandler. Your line is open.
Edward Tenthoff -- Analyst
Great. Thank you very much. I appreciate all the time and all the detail. Just looking at the orphan disease pipeline, with respect to kind of pivotal trial starts for MMA in the first half and I think also maybe generating some registrational data this year.
What do you see as sort of the path forward here in terms of trial design, patient numbers follow-up. When do you think we could actually see these two data that could lead to the filing here?
Jamey Mock -- Chief Financial Officer
Thanks, Ed. So in both cases, we'll be moving forward, as we said, either presently or very quickly in 2025 in the case of MMA into the pivotal study design. The answer is a little bit different for both. In the case of MMA, as we've discussed previously, we do believe there is a biomarker that can serve as the basis for approval.
That's the subject of our discussions with the FDA and that biomarker result, as you can imagine, can be achieved somewhat more quickly than in the case of PA, will we be looking because there is not as clear a biomarker, we'll be looking at event rates, which can take some more time. And in any event, it will depend upon the rate of enrollment in those studies and then how quickly we can get to the, you know -- Ultimately, we hope is a significant benefit either with the biomarker or with the event rates for -- as we've previously described at R&D Day, we do expect that can happen within the next couple of years. And our goal is to be launching that product in that sort of third window, 2026 plus -- but both of those products, I should say, in the Trails time horizon. If we accrue patients more quickly into those studies, it could be sooner.
If it takes longer, it could be a little bit lower. We'll obviously update as we go forward in how we're doing enrollment in those studies.
Edward Tenthoff -- Analyst
Great. Thanks, Jamey.
Operator
Our next question comes from Luca Issi with RBC Capital. Your line is open.
Luca Issi -- RBC Capital Markets -- Analyst
Great. Thanks so much for taking my question. Maybe on RSV, obviously, this year has been a little challenging, given the late approval versus the time of its contracting season, -- but how should we think about next year? Do you think it is fair for us to assume that you can get a third of the market share given peripheral syringes and obviously, no GBS? Or do you think that that will be optimistic and then maybe second on COVID in the U.S. How should we think about again about market share here? It looks to me the last year, you were gaining some shares versus Pfizer versus this year, looks like you're maybe losing some shares versus them.
So wondering if you can offer any additional color on that. Thanks so much.
Stephane V. Bancel -- Chief Executive Officer
Sure. So on -- I mean, across products, we don't guide our own share. So we're not going to start guiding our own share. As I said, we believe very much sure that being able to contract in full season will be quite different from last year.
So we'll play this out in the 2025 season. In terms of COVID, you are correct in terms of the retail market. We have lost some market share as we've indicated earlier in the year -- this has been quite a nice competitive environment in the U.S. What we don't know yet is the share in retail -- sorry, in and go on.
So we get a good sense about the share holistically at the end of the season. So that's a bit where we are at this stage.
Luca Issi -- RBC Capital Markets -- Analyst
Thanks so much.
Operator
Thank you. Our next question comes from Courtney Breen with Bernstein. Your line is open.
Courtney Breen -- AllianceBernstein -- Analyst
Fantastic. Thanks so much for the time today. I appreciate getting a question in. The first one that I want to ask was just around the Obviously, you have just initiated this new 009 trial in notal cell lung cancer that has the chemo combo proceeding.
-- the INT, -- there's a few different reasons as to why you might be doing it -- running the trial that way. It could be that you're seeing kind of -- the current paradigm is falling in the direction of chemo combination. There's a scientific belief that I works well in the post-chemo space or kind of just about practical timing for IT preparation. Can you give some context to that particular trial design? And then, as we think about expansion of this program more broadly to other tumor areas.
Kind of what's primarily gating that? Is that the scientific signals? Or is that manufacturing capacity for the Phase II development plan?
Stephen Hoge -- President
Thank you for both questions. So first, in the non-small cell lung cancer context, there has been a move -- it's really evolving standard of care. So there obviously has been a move from just adjuvant toward neoadjuvant use of checkpoints and KEYTRUDA specifically. And there are a number of patients that have a pathologic complete response, a clearance of their tumor into that as a result of that neoadjuvant chemo plus KEYTRUDA.
And so, recognizing that there's a move toward that steward of care, we also want to confirm the potential for IMT to benefit those patients. Obviously, you wouldn't be expecting a substantial benefit on those that have had a path a lot of complete response because fortunately, they do have very good clearance of their tumor. And so, the structure of the study is to obviously enroll patients allow them to get that treatment in approximately half, you can see about 680. We would expect to not have had that pathologic complete response.
And that's the group that we then randomized and go see whether IMT can add on top of adjuvant at that point, KEYTRUDA treatment with further KEYTRUDA. And I really think the driver there is a view of where we see potential standard of care moving in the lung cancer space toward neoadjuvant use of KEYTRUDA. We -- there may be other applications, thinking more broadly, where neoadjuvant treatment start to emerge, and we choose to go study the benefit of INT in the neoadjuvant setting, not just in the adjuvant setting. As far as other indications, the short version is we continue with our partner, Merck, to systematically look at all the places that we think that IoT can offer a benefit.
We aren't done yet. There are more studies coming. We are pacing ourselves as we stand up those investments. But manufacturing capacity is only one of the considerations.
It's not the primary consideration. To some extent, this is about also just pacing the start of these studies. As you can see, we're starting to deploy a large Phase II and Phase III program, and we just want to be disciplined about not adding too many at the same time. So -- we will continue.
We do continue to discuss with our partner Merck additional Phase III programs. We will start new ones in the coming year that we haven't yet announced. -- but we will pace ourselves both for manufacturing and just simply the ability to execute and the overall scale of that program.
Operator
Thank you. Our last question comes from Manos Mastorakis with Deutsche Bank. Your line is open.
Manos Mastorakis -- Deutsche Bank -- Analyst
Thank you. One question. Manos Mastorakis from Deutsche Bank on behalf of Emmanuel. So if approved, how quickly do you expect the flu market to transition to combination COVID? And would that be expected to happen in 2025 already or more of a mid-term thing? And secondly, what's the latest update and perspectives you have on the cover litigation, in particular, GSK's recent lawsuit.
Stephen Hoge -- President
I'll take the first question on timing. So on flu COVID, obviously, it depends upon approval, and it's also dependent upon TeleHealth sort of recommendation. From a purely launch timing perspective and contracting perspective, we do not believe that 2025 is the time that will happen. That's because a majority in the United States, the majority of the flu contracting is happening really early in the year in the first quarter or the first half.
And for that reason, given the timing of our current submission and approval, we wouldn't expect that to be a 2025 event. We would hope that it would happen in 2026 and ultimately, we are working toward that because we see a huge potential public health benefit in terms of prevention of other words of hundreds of thousands of hospitalizations in the United States, if we can improve compliance with COVID vaccines, as well as deliver highly effective flu vaccine. But again, the timing of that will be contingent upon the regulatory review process and then ultimate recommendation processes in different markets. Over the long term, we are believers that a combination flu covid product is the right way for us to be protecting those at high risk of respiratory viruses seasonally in all the markets in which we play in.
And so, from a very long-term view, we are quite bullish on the opportunity of the combo process.
Stephane V. Bancel -- Chief Executive Officer
We will not comment on the merits of GSK case. We would know that fresh lawsuits are not uncommon during market formation around new technology and we are prepared to defend ourselves from these claims. We look forward to presenting our case at trial on scheduled.
Operator
Thank you. Ladies and gentlemen, this does conclude the Q&A portion of today's conference. I'd like to turn the call back over to Stephane for any closing remarks.
Stephane V. Bancel -- Chief Executive Officer
Well, thank you for joining us today. We look forward to talking to many of you in the next day weeks. Have a great day.
Operator
[Operator signoff]
Duration: 0 minutes
Call participants:
Lavina Talukdar -- Senior Vice President, Head Investor Relations
Stephane V. Bancel -- Chief Executive Officer
Jamey Mock -- Chief Financial Officer
Stephen Hoge -- President
Stéphane Bancel -- Chief Executive Officer
Salveen Richter -- Analyst
Ellie Merle -- Analyst
Gena Wang -- Analyst
Michael Yee -- Analyst
Tyler Van Buren -- Analyst
Terence Flynn -- Analyst
Evan Wang -- Guggenheim Partners -- Analyst
Edward Tenthoff -- Analyst
Luca Issi -- RBC Capital Markets -- Analyst
Courtney Breen -- AllianceBernstein -- Analyst
Manos Mastorakis -- Deutsche Bank -- Analyst
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