UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549


FORM			10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _ to _

Commission File Number: 001-38753

Moderna, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware		81-3467528
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

200 Technology Square
Cambridge,	Massachusetts	02139
(Address of Principal Executive Offices)		(Zip Code)

(617) 714-6500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	MRNA	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer o

Non-accelerated filer o

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of ~~April~~July 29, 2022, there were ~~397,759,517~~391,199,544 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (Form 10-Q)~~, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”~~ contains express or implied forward-looking statements within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).statements. All statements other than ~~statements~~those of historical facts contained in this Form 10-Q are based on our management’s ~~belief~~beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Form 10-Q include, but are not limited to, statements about:

•our activities with respect to our COVID-19 vaccine, and our plans and expectations regarding future generations of our COVID-19 vaccine, including boosters, that we may develop in response to variants of the SARS-CoV-2 virus, ongoing clinical development, manufacturing and supply, pricing, commercialization, if approved, regulatory matters (including dosage for vaccines and authorization or approval for boosters), demand for COVID-19 vaccines, and third-party and governmental arrangements and potential arrangements;

•our ability to contract with third-party suppliers, distributors and manufacturers and their ability to perform adequately, particularly with respect to the timely production and delivery of our COVID-19 vaccine, including any variant booster vaccine candidates, if authorized;

•our ability and the ability of third parties with whom we contract to successfully manufacture our commercial products at scale, as well as drug substances, delivery vehicles, development candidates, and investigational medicines for preclinical and clinical use;

•costs associated with the ramping up of manufacturing for our products, including our COVID-19 vaccine, both internal and external, as well as costs associated with winding down or terminating relationships or agreements with third-party manufacturers or suppliers in connection with the production of our COVID-19 vaccine;

•the scope of protection we are able to establish and maintain for intellectual property rights covering our commercial products, investigational medicines and technology;

•the initiation, timing, progress, results, and cost of our research and development programs and our current and future preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

•risks related to the direct or indirect impact of the COVID-19 pandemic or any future large-scale adverse health event, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response, material delays in diagnoses, initiation or continuation of treatment for diseases that may be addressed by our development candidates and investigational medicines, or in patient enrollment in clinical trials, potential clinical trials, regulatory review or supply chain disruptions, and other potential impacts to our business, the effectiveness or timeliness of steps taken by us to mitigate the impact of the pandemic, and our ability to execute business continuity plans to address disruptions caused by the COVID-19 pandemic or future large-scale adverse health event;

•our anticipated next steps for our development candidates and investigational medicines that may be slowed down due to the impact of the COVID-19 pandemic, including our resources being significantly diverted towards our COVID-19 vaccine efforts, particularly if the federal government seeks to require us to divert such resources;

•our ability to identify research priorities and apply a risk-mitigated strategy to efficiently discover and develop development candidates and investigational medicines, including by applying learnings from one program to our other programs and from one modality to our other modalities;

•our ability to obtain and maintain regulatory approval of our investigational medicines;

•our ability to commercialize our products, if approved;

•the pricing and reimbursement of our medicines, if approved;

•the implementation of our business model, and strategic plans for our business, ~~investigational medicines, and technology;~~

•~~the scope of protection we are able to establish and maintain for intellectual property rights covering our~~ investigational medicines, and technology;

•estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;

•the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements, and our ability to attract collaborators with development, regulatory, and commercialization expertise;

•future agreements with third parties in connection with the commercialization of our investigational medicines, if approved;

•the size and growth potential of the markets for our investigational medicines, and our ability to serve those markets;

•our financial performance;

•the rate and degree of market acceptance of our investigational medicines;

•legal and regulatory developments in the United States and foreign countries;

•our ability to produce our products or investigational medicines with advantages in turnaround times or manufacturing cost;

•the success of competing therapies that are or may become available;

•our ability to attract and retain key scientific or management personnel; and

•developments relating to our competitors and our industry.

~~In some cases, forward-looking~~Forward-looking statements ~~can be identified by terminology~~often contain words such as “will,” “may,” “should,” “could,” “expects,” “intends,” “plans,” “aims,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. ~~These~~Although we believe that the expectations reflected in these forward-looking statements are ~~only predictions. You~~reasonable, these statements relate to future events or our operational or financial performance, and involve risks, uncertainties, and other factors that may cause our actual results to differ materially from any future results expressed or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking ~~statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results.~~statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section entitled “Risk Factors” and elsewhere in this Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual ~~events or~~ results ~~may vary significantly~~could differ materially from those expressed or implied by the forward-looking statements. ~~No forward-looking statement is a promise or a guarantee of future performance.~~

The forward-looking statements in this Form 10-Q represent our views as of the date of this Form 10-Q. We ~~anticipate that subsequent events and developments will cause our views to change. However, while we may elect~~undertake no obligation to update ~~these~~any forward-looking statements, ~~at some point in the future, we have no current intention of doing so~~ except ~~to the extent~~as required by applicable securities law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-Q.

~~This Form 10-Q includes statistical~~ However, any further disclosures made on related subjects in our subsequent reports filed with the Securities and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed toExchange Commission should be ~~reliable, although they do not guarantee the accuracy or completeness of such information. We have not independently verified the information contained in such sources.~~consulted.

TRADEMARKS

This Form 10-Q contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to may appear without the ® or ™ symbols, but such references are not intended to indicate ~~in any way,~~ that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our ~~use or display of~~reference to other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

NOTE REGARDING COMPANY REFERENCES

Unless the context otherwise requires, the terms “Moderna,” “the Company,” “we,” “us,” and “our” in this Form 10-Q refer to Moderna, Inc. and its consolidated subsidiaries.

ADDITIONAL INFORMATION

Our website, www.modernatx.com, including the Investor Relations section, www.investors.modernatx.com; and corporate blog www.modernatx.com/moderna-blog; as well as our social media channels: Facebook, www.facebook.com/modernatx; Twitter, www.twitter.com/modernatx; and LinkedIn, www.linkedin.com/company/modernatx; contain a significant amount of information about us, including financial and other information for investors. We encourage investors to visit these websites and social media channels as information is frequently updated and new information is shared. Information contained on our website, corporate blog and social media channels shall not be deemed incorporated into, or be a part of, this Form 10-Q.

Table of Contents


PART I.		Page
Item 1.	Financial Statements (Unaudited)	65
	Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30 , 2022 and December 31, 2021	5
	Condensed Consolidated Statements of Income for the three and six months ended June 30 , 2022 and 2021	6
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended ~~March 31,~~June 30 , 2022 and 2021	7
	Condensed Consolidated Statements of ~~Comprehensive Income for the three months ended March 31, 2022 and 2021~~	8
	~~Condensed Consolidated Statements of~~ Stockholders' Equity for the three and six months ended ~~March 31,~~June 30 , 2022 and 2021	9
	Condensed Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2729
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4043
Item 4.	Controls and Procedures	4043
PART II.
Item 1.	Legal Proceedings	4144
Item 1A.	Risk Factors	4144
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4345
Item 6.	Exhibits	4345
SIGNATURES		4547

Table of Contents

Item 1. Financial Statements

MODERNA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in millions, except per share data)


		March 31,		December 31,			June 30,		December 31,
		2022		2021			2022		2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	5,048	$	6,848	Cash and cash equivalents	$	2,873	$	6,848
Investments	Investments	5,067		3,879		Investments	5,024		3,879
Accounts receivable	Accounts receivable	3,173		3,175		Accounts receivable	2,691		3,175
Inventory	Inventory	1,942		1,441		Inventory	1,921		1,441
Prepaid expenses and other current assets	Prepaid expenses and other current assets	1,120		728		Prepaid expenses and other current assets	1,054		728
Total current assets	Total current assets	16,350		16,071		Total current assets	13,563		16,071
Investments, non-current	Investments, non-current	9,171		6,843		Investments, non-current	10,162		6,843
Property and equipment, net	Property and equipment, net	1,341		1,241		Property and equipment, net	1,324		1,241
Right-of-use assets, operating leases	Right-of-use assets, operating leases	132		142		Right-of-use assets, operating leases	122		142
Restricted cash, non-current	Restricted cash, non-current	12		12		Restricted cash, non-current	12		12
Deferred tax assets	Deferred tax assets	521		326		Deferred tax assets	785		326
Other non-current assets	Other non-current assets	82		34		Other non-current assets	75		34
Total assets	Total assets	$	27,609	$	24,669	Total assets	$	26,043	$	24,669
Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity					Liabilities and Stockholders’ Equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	199	$	302	Accounts payable	$	181	$	302
Accrued liabilities	Accrued liabilities	1,608		1,472		Accrued liabilities	1,780		1,472
Deferred revenue	Deferred revenue	5,599		6,253		Deferred revenue	4,093		6,253
Income taxes payable	Income taxes payable	1,592		876		Income taxes payable	349		876
Other current liabilities	Other current liabilities	240		225		Other current liabilities	409		225
Total current liabilities	Total current liabilities	9,238		9,128		Total current liabilities	6,812		9,128
Deferred revenue, non-current	Deferred revenue, non-current	464		615		Deferred revenue, non-current	405		615
Operating lease liabilities, non-current	Operating lease liabilities, non-current	95		106		Operating lease liabilities, non-current	87		106
Financing lease liabilities, non-current	Financing lease liabilities, non-current	646		599		Financing lease liabilities, non-current	641		599
Other non-current liabilities	Other non-current liabilities	91		76		Other non-current liabilities	113		76
Total liabilities	Total liabilities	10,534		10,524		Total liabilities	8,058		10,524
Commitments and contingencies (Note 12)	Commitments and contingencies (Note 12)	0		0		Commitments and contingencies (Note 12)	0		0
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock, par value $0.0001; 162 shares authorized as of March 31, 2022 and December 31, 2021; no shares issued or outstanding at March 31, 2022 and December 31, 2021		—		—
Common stock, par value $0.0001; 1,600 shares authorized as of March 31, 2022 and December 31, 2021; 400 and 403 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		—		—
Preferred stock, par value $0.0001; 162 shares authorized as of June 30, 2022 and December 31, 2021; no shares issued or outstanding at June 30, 2022 and December 31, 2021						Preferred stock, par value $0.0001; 162 shares authorized as of June 30, 2022 and December 31, 2021; no shares issued or outstanding at June 30, 2022 and December 31, 2021	—		—
Common stock, par value $0.0001; 1,600 shares authorized as of June 30, 2022 and December 31, 2021; 392 and 403 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively						Common stock, par value $0.0001; 1,600 shares authorized as of June 30, 2022 and December 31, 2021; 392 and 403 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	—		—
Additional paid-in capital	Additional paid-in capital	3,644		4,211		Additional paid-in capital	2,413		4,211
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(184)		(24)		Accumulated other comprehensive loss	(240)		(24)
Retained earnings	Retained earnings	13,615		9,958		Retained earnings	15,812		9,958
Total stockholders’ equity	Total stockholders’ equity	17,075		14,145		Total stockholders’ equity	17,985		14,145
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	27,609	$	24,669	Total liabilities and stockholders’ equity	$	26,043	$	24,669

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, in millions, except per share data)


		Three Months Ended March 31,					Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021				2022		2021		2022		2021
Revenue:	Revenue:							Revenue:
Product sales	Product sales		$	5,925	$	1,733		Product sales	$	4,531	$	4,197	$	10,456	$	5,930
Grant revenue	Grant revenue		126		194			Grant revenue	183		139		309		333
Collaboration revenue	Collaboration revenue		15		10			Collaboration revenue	35		18		50		28
Total revenue	Total revenue		6,066		1,937			Total revenue	4,749		4,354		10,815		6,291
Operating expenses:	Operating expenses:							Operating expenses:
Cost of sales	Cost of sales		1,017		193			Cost of sales	1,381		750		2,398		943
Research and development	Research and development		554		401			Research and development	710		421		1,264		822
Selling, general and administrative	Selling, general and administrative		268		77			Selling, general and administrative	211		121		479		198
Total operating expenses	Total operating expenses		1,839		671			Total operating expenses	2,302		1,292		4,141		1,963
Income from operations	Income from operations		4,227		1,266			Income from operations	2,447		3,062		6,674		4,328
Interest income	Interest income		15		4			Interest income	40		3		55		7
Other expense, net	Other expense, net		(13)		(10)			Other expense, net	(13)		(2)		(26)		(12)
Income before income taxes	Income before income taxes		4,229		1,260			Income before income taxes	2,474		3,063		6,703		4,323
Provision for income taxes	Provision for income taxes		572		39			Provision for income taxes	277		283		849		322
Net income	Net income		$	3,657	$	1,221		Net income	$	2,197	$	2,780	$	5,854	$	4,001

Earnings per share:	Earnings per share:							Earnings per share:
Basic	Basic		$	9.09	$	3.05		Basic	$	5.55	$	6.93	$	14.66	$	9.98
Diluted	Diluted		$	8.58	$	2.84		Diluted	$	5.24	$	6.46	$	13.85	$	9.30

Weighted average common shares used in calculation of earnings per share:	Weighted average common shares used in calculation of earnings per share:							Weighted average common shares used in calculation of earnings per share:
Basic	Basic		402		400			Basic	396		402		399		401
Diluted	Diluted		426		430			Diluted	419		431		423		430

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, in millions)


		Three Months Ended March 31,					Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021				2022		2021		2022		2021
Net income	Net income		$	3,657	$	1,221		Net income	$	2,197	$	2,780	$	5,854	$	4,001
Other comprehensive loss, net of tax:
Other comprehensive (loss) income, net of tax:								Other comprehensive (loss) income, net of tax:
Available-for-sales securities:	Available-for-sales securities:							Available-for-sales securities:
Unrealized losses on available-for-sale debt securities	Unrealized losses on available-for-sale debt securities		(178)		(2)			Unrealized losses on available-for-sale debt securities	(80)		(5)		(258)		(7)
Less: net realized losses on available-for-sale securities reclassified in net income			7		—
Less: net realized losses (gains) on available-for-sale securities reclassified in net income								Less: net realized losses (gains) on available-for-sale securities reclassified in net income	8		(1)		15		(1)
Net decrease from available-for-sale debt securities	Net decrease from available-for-sale debt securities		(171)		(2)			Net decrease from available-for-sale debt securities	(72)		(6)		(243)		(8)
Cash flow hedges:	Cash flow hedges:							Cash flow hedges:
Unrealized gains on derivative instruments	Unrealized gains on derivative instruments		25		—			Unrealized gains on derivative instruments	46		21		71		21
Less: net realized (gains) on derivative instruments reclassified in net income	Less: net realized (gains) on derivative instruments reclassified in net income		(14)		—			Less: net realized (gains) on derivative instruments reclassified in net income	(30)		—		(44)		—
Net increase from derivatives designated as hedging instruments	Net increase from derivatives designated as hedging instruments		11		—			Net increase from derivatives designated as hedging instruments	16		21		27		21
Total other comprehensive loss			(160)		(2)
Total other comprehensive (loss) income								Total other comprehensive (loss) income	(56)		15		(216)		13
Comprehensive income	Comprehensive income		$	3,497	$	1,219		Comprehensive income	$	2,141	$	2,795	$	5,638	$	4,014

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

(Unaudited, in millions)

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders’ Equity
Shares Amount
Balance at December 31, 2021 403 $ — $ 4,211 $ (24) $ 9,958 $ 14,145
Exercise of options to purchase common stock 1 — 12 — — 12
Stock-based compensation — — 44 — — 44
Other comprehensive loss, net of tax — — — (160) — (160)
Repurchase of common stock (4) — (623) — — (623)
Net income — — — — 3,657 3,657
Balance at March 31, 2022 400 $ — $ 3,644 $ (184) $ 13,615 $ 17,075


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance at March 31, 2022	400	$	—	$	3,644	$	(184)	$	13,615	$	17,075

Exercise of options to purchase common stock	1	—		8		—		—		8

Purchase of common stock under employee stock purchase plan	—	—		9		—		—		9
Stock-based compensation	—	—		50		—		—		50
Other comprehensive loss, net of tax	—	—		—		(56)		—		(56)
Repurchase of common stock	(9)	—		(1,298)		—		—		(1,298)
Net income	—	—		—		—		2,197		2,197
Balance at June 30, 2022	392	$	—	$	2,413	$	(240)	$	15,812	$	17,985


		Common Stock			Additional Paid-In Capital				Accumulated Other Comprehensive Income			Accumulated Deficit				Total Stockholders’ Equity				Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Income			Retained Earnings (Accumulated Deficit)			Total Stockholders’ Equity
		Shares	Amount								Shares								Amount
Balance at December 31, 2020		399	$	—			$	4,802						$	3			$	(2,244)		$	2,561
Balance at March 31, 2021																			Balance at March 31, 2021	401			$	—		$	4,860		$	1		$	(1,023)		$	3,838

Exercise of options to purchase common stock	Exercise of options to purchase common stock	2	—		28				—			—				28			Exercise of options to purchase common stock	2			—		31			—			—			31

Purchase of common stock under employee stock purchase plan																			Purchase of common stock under employee stock purchase plan	—			—		5			—			—			5
Stock-based compensation	Stock-based compensation	—	—		30				—			—				30			Stock-based compensation	—			—		35			—			—			35
Other comprehensive loss, net of tax		—	—		—				(2)			—				(2)
Other comprehensive income, net of tax																			Other comprehensive income, net of tax	—			—		—			15			—			15
Net income	Net income	—	—		—				—			1,221				1,221			Net income	—			—		—			—			2,780			2,780
Balance at March 31, 2021		401	$	—	$	4,860			$	1		$	(1,023)			$	3,838
Balance at June 30, 2021																			Balance at June 30, 2021	403			$	—	$	4,931		$	16		$	1,757		$	6,704

Table of Contents


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2021	403	$	—	$	4,211	$	(24)	$	9,958	$	14,145

Exercise of options to purchase common stock	2	—		20		—		—		20

Purchase of common stock under employee stock purchase plan	—	—		9		—		—		9
Stock-based compensation	—	—		94		—		—		94
Other comprehensive loss, net of tax	—	—		—		(216)		—		(216)
Repurchase of common stock	(13)	—		(1,921)		—		—		(1,921)
Net income	—	—		—		—		5,854		5,854
Balance at June 30, 2022	392	$	—	$	2,413	$	(240)	$	15,812	$	17,985


	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2020	399	$	—	$	4,802	$	3	$	(2,244)	$	2,561


Exercise of options to purchase common stock	4	—		59		—		—		59
Purchase of common stock under employee stock purchase plan	—	—		5		—		—		5
Stock-based compensation	—	—		65		—		—		65
Other comprehensive income, net of tax	—	—		—		13		—		13
Net income	—	—		—		—		4,001		4,001
Balance at June 30, 2021	403	$	—	$	4,931	$	16	$	1,757	$	6,704

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)


		Three Months Ended March 31,					Six Months Ended June 30,
		2022		2021			2022		2021
Operating activities	Operating activities					Operating activities
Net income	Net income	$	3,657	$	1,221	Net income	$	5,854	$	4,001
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	Stock-based compensation	44		30		Stock-based compensation	94		65
Depreciation and amortization	Depreciation and amortization	79		15		Depreciation and amortization	155		84
Amortization/accretion of investments	Amortization/accretion of investments	18		5		Amortization/accretion of investments	29		13

Deferred income taxes	Deferred income taxes	(146)		(50)		Deferred income taxes	(376)		(72)
Other non-cash items						Other non-cash items	15		—
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Accounts receivable	Accounts receivable	1		(1,819)		Accounts receivable	484		(629)
Prepaid expenses and other assets	Prepaid expenses and other assets	(414)		(12)		Prepaid expenses and other assets	(324)		(110)
Inventory	Inventory	(501)		(448)		Inventory	(480)		(596)
Right-of-use assets, operating leases	Right-of-use assets, operating leases	10		2		Right-of-use assets, operating leases	20		(14)
Accounts payable	Accounts payable	(35)		(15)		Accounts payable	(56)		44
Accrued liabilities	Accrued liabilities	114		285		Accrued liabilities	305		367
Deferred revenue	Deferred revenue	(805)		3,666		Deferred revenue	(2,370)		3,433
Income taxes payable	Income taxes payable	716		90		Income taxes payable	(527)		377
Operating lease liabilities	Operating lease liabilities	(10)		(2)		Operating lease liabilities	(19)		8
Other liabilities	Other liabilities	35		3		Other liabilities	263		63
Net cash provided by operating activities	Net cash provided by operating activities	2,763		2,971		Net cash provided by operating activities	3,067		7,034
Investing activities	Investing activities					Investing activities
Purchases of marketable securities	Purchases of marketable securities	(5,572)		(726)		Purchases of marketable securities	(8,734)		(6,559)
Proceeds from maturities of marketable securities	Proceeds from maturities of marketable securities	441		339		Proceeds from maturities of marketable securities	1,409		860
Proceeds from sales of marketable securities	Proceeds from sales of marketable securities	1,377		242		Proceeds from sales of marketable securities	2,506		1,706
Purchases of property and equipment	Purchases of property and equipment	(132)		(35)		Purchases of property and equipment	(219)		(65)
Investment in convertible notes	Investment in convertible notes	(35)		—		Investment in convertible notes	(35)		—
Net cash used in investing activities	Net cash used in investing activities	(3,921)		(180)		Net cash used in investing activities	(5,073)		(4,058)
Financing activities	Financing activities					Financing activities

Proceeds from issuance of common stock through equity plans	Proceeds from issuance of common stock through equity plans	12		28		Proceeds from issuance of common stock through equity plans	29		64

Repurchase of common stock	Repurchase of common stock	(623)		—		Repurchase of common stock	(1,921)		—
Changes in financing lease liabilities	Changes in financing lease liabilities	(31)		(2)		Changes in financing lease liabilities	(77)		(62)
Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(642)		26		Net cash (used in) provided by financing activities	(1,969)		2
Net (decrease) increase in cash, cash equivalents and restricted cash	Net (decrease) increase in cash, cash equivalents and restricted cash	(1,800)		2,817		Net (decrease) increase in cash, cash equivalents and restricted cash	(3,975)		2,978
Cash, cash equivalents and restricted cash, beginning of year	Cash, cash equivalents and restricted cash, beginning of year	6,860		2,636		Cash, cash equivalents and restricted cash, beginning of year	6,860		2,636
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	5,060	$	5,453	Cash, cash equivalents and restricted cash, end of period	$	2,885	$	5,614
Non-cash investing and financing activities	Non-cash investing and financing activities					Non-cash investing and financing activities
Purchases of property and equipment included in accounts payable and accrued liabilities	Purchases of property and equipment included in accounts payable and accrued liabilities	$	64	$	21	Purchases of property and equipment included in accounts payable and accrued liabilities	$	49	$	45
Right-of-use assets obtained through finance lease modifications and reassessments	Right-of-use assets obtained through finance lease modifications and reassessments	$	—	$	51	Right-of-use assets obtained through finance lease modifications and reassessments	$	—	$	363
Right-of-use assets obtained in exchange for financing lease liabilities	Right-of-use assets obtained in exchange for financing lease liabilities	$	94	$	—	Right-of-use assets obtained in exchange for financing lease liabilities	$	94	$	126

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

MODERNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Description of the Business

Moderna, Inc. (collectively, with its consolidated subsidiaries, any of Moderna, we, us, our, or the Company) is a biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines to create a new generation of transformative medicines to improve the lives of patients. Our platform builds on continuous advances in basic and applied mRNA science, delivery technology, and manufacturing, providing us the capability to pursue in parallel a robust pipeline of new development candidates. We are developing therapeutics and vaccines for infectious diseases, immuno-oncology, rare diseases, autoimmune and cardiovascular diseases, independently and with our strategic collaborators.

On December 18, 2020, we received an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for the emergency use of the Moderna COVID-19 Vaccine (also referred to as mRNA-1273 and marketed under the brand name Spikevax®) ~~at the~~as a two-dose, 100 µg ~~dose level~~primary series in individuals 18 years of age or older. ~~Subsequently,~~In January 2022, we ~~have also~~ received ~~authorization~~full commercial approval for ~~our~~Spikevax as a two-dose, 100 µg primary series to prevent COVID-19 ~~vaccine from health agencies~~in individuals 18 years of age and older in the United States, and Spikevax is approved or authorized in individuals 18 years and older in more than ~~70 countries and from the World Health Organization.~~80 countries. In addition, we have received authorization from the FDA and global regulators in more than 40 countries for our COVID-19 vaccine as a two-dose, 100 µg primary series in adolescents aged 12-17 years and as a two-dose, 50 µg primary series in children ages 6 through 11 years old. Additionally, a two-dose, 25 µg primary series of our COVID-19 vaccine is authorized in ~~adolescents~~young children aged ~~12-17~~6 months to 5 years old in ~~more than 40 countries. We have received authorization for a two-dose 50 µg primary series of our COVID-19 vaccine in children ages 6 to 11 in more than 35 countries.~~ the United States, Canada, Australia, and other jurisdictions.

The FDA, European Medicines Agency (EMA), Swissmedic and other health agencies around the world have authorized a booster dose of our COVID-19 vaccine at ~~the~~ 50 µg dose level for adults ages 18 years and older.

~~In January 2022, we received full commercial approval~~ The FDA and other health agencies have also authorized a second booster dose at the 50 µg dose level for ~~Spikevax to prevent COVID-19 in individuals~~adults 50 years and older and adults 18 years of age and older ~~in the United States. Spikevax also has full commercial approval in individuals 18 years~~with certain kinds of age and older in Canada and the United Kingdom. In April 2022, we submitted a request for an EUA for a two-dose 25 μg primary series of our COVID-19 vaccine in children 6 months to 6 years of age to the FDA.~~Similar requests for pediatric authorizations are underway with international regulatory authorities.~~immunocompromise.

2. Summary of Basis of Presentation and Recent Accounting Standards

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements that accompany these notes have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Form 10-K). Any reference in these notes to applicable guidance is meant to refer to the authoritative accounting principles generally accepted in the United States as found in the Accounting Standard Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). This report should be read in conjunction with the audited consolidated financial statements in our 2021 Form 10-K.

The condensed consolidated financial statements include Moderna, Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and six months ended ~~March 31,~~June 30, 2022 are consistent with those described in our 2021 Form 10-K. The results of operations for the three and six months ended ~~March 31,~~June 30, 2022 are not necessarily indicative of the operating results to be expected for the full fiscal year or future operating periods.

Table of Contents

Use of Estimates

We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. We base our estimates on historical experience and various relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods that are not readily apparent from other sources. Significant estimates relied upon in preparing these financial statements include, but are not limited to, critical accounting policies or estimates related to revenue recognition, income taxes, valuation allowance on deferred tax assets, leases, fair value of financial instruments, derivative financial instruments, inventory, firm purchase commitment liabilities,

~~Table of Contents~~

useful lives of property and equipment, research and development expenses, and stock-based compensation. The actual results that we experience may differ materially from our estimates.

Comprehensive Income

Comprehensive income includes net income and other comprehensive income/loss for the period. Other comprehensive loss consists of unrealized ~~gains/losses and~~ gains/losses on our investments and derivatives designated as hedging instruments. Total comprehensive income for all periods presented has been disclosed in the condensed consolidated statements of comprehensive income.

The components of accumulated other comprehensive loss for the three and six months ended ~~March 31,~~June 30, 2022 were as follows (in millions):


		Unrealized Loss on Available-for-Sale Debt Securities		Net Unrealized Gains on Derivatives Designated As Hedging Instruments		Total			Unrealized Loss on Available-for-Sale Debt Securities		Net Unrealized Gains on Derivatives Designated As Hedging Instruments		Total
Accumulated other comprehensive loss, balance at December 31, 2021	Accumulated other comprehensive loss, balance at December 31, 2021	$	(40)	$	16	$	(24)	Accumulated other comprehensive loss, balance at December 31, 2021	$	(40)	$	16	$	(24)
Other comprehensive loss	Other comprehensive loss	(171)		11		(160)		Other comprehensive loss	(171)		11		(160)
Accumulated other comprehensive loss, balance at March 31, 2022	Accumulated other comprehensive loss, balance at March 31, 2022	$	(211)	$	27	$	(184)	Accumulated other comprehensive loss, balance at March 31, 2022	(211)		27		(184)
Other comprehensive loss								Other comprehensive loss	(72)		16		(56)
Accumulated other comprehensive loss, balance at June 30, 2022								Accumulated other comprehensive loss, balance at June 30, 2022	$	(283)	$	43	$	(240)

Restricted Cash

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

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


		March 31,					June 30,
		2022		2021			2022		2021
Cash and cash equivalents	Cash and cash equivalents	$	5,048	$	5,442	Cash and cash equivalents	$	2,873	$	5,603

Restricted cash, non-current	Restricted cash, non-current	12		11		Restricted cash, non-current	12		11
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	5,060	$	5,453	Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	2,885	$	5,614

Recently Issued Accounting Standards Not Yet Adopted

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

3. Product Sales

Product sales are primarily associated with our COVID-19 vaccine supply agreements with the U.S. Government, other international

governments and Gavi (on behalf of the COVAX Facility).

Table of Contents

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


		Three Months Ended March 31,					Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021				2022		2021		2022		2021
United States	United States		$	945	$	1,358		United States	$	1,450	$	2,093	$	2,395	$	3,451
Europe	Europe		2,076		284			Europe	1,390		1,056		3,466		1,340
Rest of world (1)	Rest of world (1)		2,904		91			Rest of world (1)	1,691		1,048		4,595		1,139
Total	Total		$	5,925	$	1,733		Total	$	4,531	$	4,197	$	10,456	$	5,930

_______

(1) Includes product sales recognized under the agreement with Gavi, which facilitates the allocation and distribution of our COVID-19 vaccine around the world, particularly for low- and middle-income countries.

As of ~~March 31,~~June 30, 2022, our COVID-19 vaccine (marketed under the brand name Spikevax) was our only commercial product authorized for use.

As of ~~March 31,~~June 30, 2022 and December 31, 2021, we had deferred revenue of ~~$5.9~~$4.3 billion and $6.7 billion, respectively, related to customer deposits. We expect ~~$5.5~~$4.0 billion of our deferred revenue related to customer deposits as of ~~March 31,~~June 30, 2022 to be realized in less than one year. Timing of product manufacturing, delivery, and receipt of marketing approval will determine the period in which ~~revenue is~~product sales are recognized.

4. Grant Revenue

In September 2020, we entered into an agreement with the Defense Advanced Research Projects Agency (DARPA) for an award of up to $56 million to fund development of a mobile manufacturing prototype leveraging our existing manufacturing technology that is capable of rapidly producing therapeutics and vaccines. As of ~~March 31,~~June 30, 2022, the committed funding, net of revenue earned was $7 million. An additional ~~$33~~$30 million of funding will be available if DARPA exercises additional contract options.

In April 2020, we entered into an agreement with the Biomedical Advanced Research and Development Authority (BARDA), a division of the Office of the Assistant Secretary for Preparedness and Response within the U.S. Department of Health and Human Services (HHS), for an award of up to $483 million to accelerate development of mRNA-1273, our vaccine candidate against COVID-19. The agreement was amended in both 2020 and 2021 to provide for additional commitments to support various late-stage clinical development efforts of mRNA-1273, including a 30,000 participant Phase 3 study, pediatric clinical trials and pharmacovigilance studies. In March 2022, we entered into a further amendment to the BARDA agreement, increasing the amount of potential reimbursements by $308 million, in connection with costs associated with the clinical development for the adolescent and pediatric studies and the Phase 3 pivotal study. The maximum award from BARDA, inclusive of the 2020, 2021 and 2022 amendments, was approximately $1.7 billion. All contract options have been exercised. As of ~~March 31,~~June 30, 2022, the remaining available funding, net of revenue earned was $~~378~~203 million.

In September 2016, we received from BARDA an award of up to $126 million, subsequently adjusted to $117 million in 2021, to help fund our Zika vaccine program. NaN of the 4 contract options have been exercised. As of ~~March 31,~~June 30, 2022, the remaining available funding, net of revenue earned was ~~$46~~$42 million, with an additional $8 million available if the final contract option is exercised. The performance period of the grant will expire on September 30, 2022 and any remaining funding at expiry will be forfeited.

In January 2016, we entered a global health project framework agreement with the Bill and Melinda Gates Foundation (Gates Foundation) to advance mRNA-based development projects for various infectious diseases, including human immunodeficiency virus (HIV). As of ~~March 31,~~June 30, 2022, the available funding, net of revenue earned was $7 million, with up to an additional $80 million available if additional follow-on projects are approved.

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


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
BARDA	BARDA		$	122		$	192	BARDA	$	179	$	134	$	301	$	326
Other grant revenue	Other grant revenue		4			2		Other grant revenue	4		5		8		7
Total grant revenue	Total grant revenue		$	126		$	194	Total grant revenue	$	183	$	139	$	309	$	333

Table of Contents

5. Collaboration Agreements

We have entered into collaboration agreements with strategic collaborators to accelerate the discovery and advancement of potential mRNA medicines across therapeutic areas. As of ~~March 31,~~June 30, 2022 and December 31, 2021, we had collaboration agreements with AstraZeneca plc (AstraZeneca), Merck & Co., Inc (Merck), Vertex Pharmaceuticals Incorporated and Vertex Pharmaceuticals (Europe) Limited (together, Vertex), and others. Please refer to our 2021 Form 10-K under the heading “Third-Party Strategic Alliances” and Note 5 to our consolidated financial statements for further description of these collaboration agreements.

The following table summarizes our total consolidated revenue from our strategic collaborators for the periods presented (in millions):


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
Collaboration Revenue by Strategic Collaborator:	Collaboration Revenue by Strategic Collaborator:		2022			2021		Collaboration Revenue by Strategic Collaborator:	2022		2021		2022		2021

AstraZeneca								AstraZeneca	$	4	$	4	$	4	$	4
Merck	Merck		$	10		$	—	Merck	5		4		15��		4
Vertex	Vertex		4			9		Vertex	25		9		29		18
Other	Other		1			1		Other	1		1		2		2
Total collaboration revenue	Total collaboration revenue		$	15		$	10	Total collaboration revenue	$	35	$	18	$	50	$	28

The following table presents changes in the balances of our receivables and contract liabilities related to our strategic collaboration agreements during the ~~three~~six months ended ~~March 31,~~June 30, 2022 (in millions):


		December 31, 2021		Additions		Deductions		March 31, 2022			December 31, 2021		Additions		Deductions		June 30, 2022
Contract Assets:	Contract Assets:									Contract Assets:
Accounts receivable	Accounts receivable	$	9	$	3	$	(9)	$	3	Accounts receivable	$	9	$	13	$	(11)	$	11
Contract Liabilities:	Contract Liabilities:									Contract Liabilities:
Deferred revenue	Deferred revenue	$	204	$	3	$	(15)	$	192	Deferred revenue	$	204	$	6	$	(43)	$	167

As of ~~March 31,~~June 30, 2022, the aggregated amount of the transaction price allocated to performance obligations under our collaboration agreements that are unsatisfied or partially unsatisfied was ~~$268~~$236 million.

In addition to the collaboration agreements mentioned above, 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 become probable. In addition, we may be required to pay significant royalties on future sales if products related to these arrangements are commercialized.

Table of Contents

6. Financial Instruments

Cash and Cash Equivalents and Investments

The following tables summarize our cash and available-for-sale securities by significant investment category at ~~March 31,~~June 30, 2022 and December 31, 2021 (in millions):


		March 31, 2022															June 30, 2022
		Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		Cash and Cash Equivalents		Current Marketable Securities		Non- Current Marketable Securities			Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		Cash and Cash Equivalents		Current Marketable Securities		Non- Current Marketable Securities
Cash and cash equivalents	Cash and cash equivalents	$	5,048	$	—	$	—	$	5,048	$	5,048	$	—	$	—	Cash and cash equivalents	$	2,873	$	—	$	—	$	2,873	$	2,873	$	—	$	—
Available-for-sale:	Available-for-sale:															Available-for-sale:
Certificates of deposit	Certificates of deposit	251		—		—		251		—		251		—		Certificates of deposit	348		—		—		348		—		348		—
U.S. treasury bills	U.S. treasury bills	515		—		(2)		513		—		513		—		U.S. treasury bills	259		—		(2)		257		—		257		—
U.S. treasury notes	U.S. treasury notes	7,956		—		(147)		7,809		—		2,820		4,989		U.S. treasury notes	8,231		—		(189)		8,042		—		3,054		4,988
Corporate debt securities	Corporate debt securities	5,665		—		(117)		5,548		—		1,470		4,078		Corporate debt securities	6,597		—		(181)		6,416		—		1,352		5,064
Government debt securities	Government debt securities	122		—		(5)		117		—		13		104		Government debt securities	129		—		(6)		123		—		13		110
Total	Total	$	19,557	$	—	$	(271)	$	19,286	$	5,048	$	5,067	$	9,171	Total	$	18,437	$	—	$	(378)	$	18,059	$	2,873	$	5,024	$	10,162

		December 31, 2021															December 31, 2021
		Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		Cash and Cash Equivalents		Current Marketable Securities		Non- Current Marketable Securities			Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		Cash and Cash Equivalents		Current Marketable Securities		Non- Current Marketable Securities
Cash and cash equivalents	Cash and cash equivalents	$	6,848	$	—	$	—	$	6,848	$	6,848	$	—	$	—	Cash and cash equivalents	$	6,848	$	—	$	—	$	6,848	$	6,848	$	—	$	—
Available-for-sale:	Available-for-sale:															Available-for-sale:
Certificates of deposit	Certificates of deposit	80		—		—		80		—		80		—		Certificates of deposit	80		—		—		80		—		80		—
U.S. treasury bills	U.S. treasury bills	479		—		—		479		—		479		—		U.S. treasury bills	479		—		—		479		—		479		—
U.S. treasury notes	U.S. treasury notes	6,595		—		(31)		6,564		—		1,984		4,580		U.S. treasury notes	6,595		—		(31)		6,564		—		1,984		4,580
Corporate debt securities	Corporate debt securities	3,508		—		(20)		3,488		—		1,323		2,165		Corporate debt securities	3,508		—		(20)		3,488		—		1,323		2,165
Government debt securities	Government debt securities	112		—		(1)		111		—		13		98		Government debt securities	112		—		(1)		111		—		13		98
Total	Total	$	17,622	$	—	$	(52)	$	17,570	$	6,848	$	3,879	$	6,843	Total	$	17,622	$	—	$	(52)	$	17,570	$	6,848	$	3,879	$	6,843

The amortized cost and estimated fair value of available-for-sale securities by contractual maturity at ~~March 31,~~June 30, 2022 and December 31, 2021 were as follows (in millions):


		March 31, 2022					June 30, 2022
		Amortized Cost		Estimated Fair Value			Amortized Cost		Estimated Fair Value
Due in one year or less	Due in one year or less	$	5,094	$	5,067	Due in one year or less	$	5,079	$	5,024
Due after one year through five years	Due after one year through five years	9,415		9,171		Due after one year through five years	10,485		10,162
Total	Total	$	14,509	$	14,238	Total	$	15,564	$	15,186


	December 31, 2021
	Amortized Cost		Estimated Fair Value
Due in one year or less	$	3,882	$	3,879
Due after one year through five years	6,892		6,843
Total	$	10,774	$	10,722

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.

Table of Contents

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 did not recognize any impairment charges related to available-for-sale securities for the three and six months ended ~~March 31,~~June 30, 2022 and 2021. We did not record any credit-related allowance to available-for-sale securities as of ~~March 31,~~June 30, 2022 and December 31, 2021.

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 at ~~March 31,~~June 30, 2022 and December 31, 2021 (in millions):


		Less than 12 Months				12 Months or More				Total					Less than 12 Months				12 Months or More				Total
		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value			Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value
As of March 31, 2022:
As of June 30, 2022:														As of June 30, 2022:

U.S. treasury bills	U.S. treasury bills	$	(2)	$	513	$	—	$	—	$	(2)	$	513	U.S. treasury bills	$	(2)	$	256	$	—	$	—	$	(2)	$	256
U.S. treasury notes	U.S. treasury notes	(147)		7,722		—		—		(147)		7,722		U.S. treasury notes	(185)		7,873		(4)		132		(189)		8,005
Corporate debt securities	Corporate debt securities	(117)		4,646		—		1		(117)		4,647		Corporate debt securities	(164)		5,388		(17)		385		(181)		5,773
Government debt securities	Government debt securities	(5)		116		—		—		(5)		116		Government debt securities	(6)		123		—		—		(6)		123
Total	Total	$	(271)	$	12,997	$	—	$	1	$	(271)	$	12,998	Total	$	(357)	$	13,640	$	(21)	$	517	$	(378)	$	14,157

As of December 31, 2021:	As of December 31, 2021:													As of December 31, 2021:

U.S. treasury bills	U.S. treasury bills	$	—	$	329	$	—	$	—	$	—	$	329	U.S. treasury bills	$	—	$	329	$	—	$	—	$	—	$	329
U.S. treasury notes	U.S. treasury notes	(31)		6,332		—		—		(31)		6,332		U.S. treasury notes	(31)		6,332		—		—		(31)		6,332
Corporate debt securities	Corporate debt securities	(20)		2,573		—		1		(20)		2,574		Corporate debt securities	(20)		2,573		—		1		(20)		2,574
Government debt securities	Government debt securities	(1)		112		—		—		(1)		112		Government debt securities	(1)		112		—		—		(1)		112
Total	Total	$	(52)	$	9,346	$	—	$	1	$	(52)	$	9,347	Total	$	(52)	$	9,346	$	—	$	1	$	(52)	$	9,347

At ~~March 31,~~June 30, 2022 and December 31, 2021, we held ~~569~~634 and 384 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).

Table of Contents

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of ~~March 31,~~June 30, 2022 and December 31, 2021 (in millions):


		Fair value at March 31, 2022			Fair Value Measurement Using							Fair value at June 30, 2022			Fair Value Measurement Using
				Level 1			Level 2							Level 1			Level 2
Assets:	Assets:										Assets:
Money market funds	Money market funds	$	2,808		$	2,808		$	—	Money market funds		$	1,242		$	1,242		$	—
Certificates of deposit	Certificates of deposit	251			—			251		Certificates of deposit		348			—			348
U.S. treasury bills	U.S. treasury bills	513			—			513		U.S. treasury bills		257			—			257
U.S. treasury notes	U.S. treasury notes	7,809			—			7,809		U.S. treasury notes		8,042			—			8,042
Corporate debt securities	Corporate debt securities	5,548			—			5,548		Corporate debt securities		6,416			—			6,416
Government debt securities	Government debt securities	117			—			117		Government debt securities		123			—			123
Derivative instruments (Note 7)	Derivative instruments (Note 7)	35			—			35		Derivative instruments (Note 7)		58			—			58
Total	Total	$	17,081		$	2,808		$	14,273	Total		$	16,486		$	1,242		$	15,244
Liabilities:	Liabilities:									Liabilities:
Derivative instruments (Note 7)	Derivative instruments (Note 7)	$	9		$	—		$	9	Derivative instruments (Note 7)		$	2		$	—		$	2


	Fair value at December 31, 2021		Fair Value Measurement Using
			Level 1		Level 2
Assets:
Money market funds	$	2,329	$	2,329	$	—
Certificates of deposit	80		—		80
U.S. treasury bills	479		—		479
U.S. treasury notes	6,564		—		6,564
Corporate debt securities	3,488		—		3,488
Government debt securities	111		—		111
Derivative instruments (Note 7)	21		—		21
Total	$	13,072	$	2,329	$	10,743
Liabilities:
Derivative instruments (Note 7)	$	7	$	—	$	7

As of ~~March 31,~~June 30, 2022 and December 31, 2021, 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.

In addition, as of ~~March 31,~~June 30, 2022, we had $30 million in equity investments without readily determinable fair values, which are recorded within other non-current assets in our condensed consolidated balance sheets and excluded from the fair value measurement tables above. We did not have equity investments as of December 31, 2021.

7. Derivative Financial Instruments

We transact business in various foreign currencies and have international sales and expenses denominated in foreign currencies. Therefore, we are exposed to certain risks arising from both our business operations and economic conditions. Our risk management strategy includes the use of derivative financial instruments to hedge: (1) forecasted product sales that are denominated in foreign currencies and (2) foreign currency exchange rate fluctuations on monetary assets or liabilities denominated in foreign currencies. We do not enter into derivative financial contracts for speculative or trading purposes. We do not believe that we are exposed to more than a nominal amount of credit risk in our foreign currency hedges, as counterparties are large, global and well-capitalized financial institutions. We classify cash flows from our derivative transactions as cash flows from operating activities in our condensed consolidated statements of cash flows.

Table of Contents

Cash Flow Hedges

We mitigate the foreign exchange risk arising from the fluctuations in foreign currency denominated product sales in Euro through a foreign currency cash flow hedging program, using forward contracts and foreign currency options that do not exceed 15 months in duration. We hedge these cash flow exposures to reduce the risk that our earnings and cash flows will be adversely affected by changes in exchange rates. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. The derivative assets or liabilities associated with our hedging activities are recorded at fair value in other current assets or other current liabilities, respectively, in our condensed consolidated balance sheets. The gains or losses resulting from changes in the fair value of these hedges are initially recorded as a component of accumulated other comprehensive income (loss) (AOCI) in stockholders’ equity and subsequently reclassified to product sales in the period during which the hedged transaction affects earnings. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, within the defined hedge period, we reclassify the gains or losses on the related cash flow hedge from AOCI to other expense, net in our condensed consolidated statements of income. We evaluate hedge effectiveness at the inception of the hedge prospectively, and on an on-going basis both retrospectively and prospectively. If we do not elect hedge accounting, or the contract does not qualify for hedge accounting treatment, the changes in fair value from period to period are recorded as a component of other expense, net in our condensed consolidated statements of income. As of ~~March 31,~~June 30, 2022, we had net deferred gains of ~~$35~~$55 million on our foreign currency forward contracts included in AOCI that are expected to be recognized into product sales within the next 12 months.

Balance Sheet Hedges

We enter into foreign currency forward contracts to hedge fluctuations associated with foreign currency denominated monetary assets and liabilities, primarily accounts receivable, accounts payable and lease liabilities in Euro, Japanese Yen and Swiss Franc, that are not designated for hedge accounting treatment. Therefore, these forward contracts are accounted for as derivatives whereby the fair value of the contracts are reported as other current assets or other current liabilities in our condensed consolidated balance sheets, and gains and losses resulting from changes in the fair value are recorded as a component of other expense, net in our condensed consolidated statements of income. The gains and losses on these foreign currency forward contracts generally offset the gains and losses in the underlying foreign currency denominated assets and liabilities, which are also recorded to other expense, net, in our condensed consolidated statements of income.

Total gross notional amount and fair value of our foreign currency derivatives were as follows (in millions):


		March 31, 2022										June 30, 2022
		Notional Amount			Fair Value							Notional Amount			Fair Value
				Asset (1)			Liability (2)							Asset (1)			Liability (2)
Derivatives designated as cash flow hedging instruments:	Derivatives designated as cash flow hedging instruments:										Derivatives designated as cash flow hedging instruments:
Foreign currency forward contracts	Foreign currency forward contracts	$	969		$	35		$	—	Foreign currency forward contracts		$	1,153		$	37		$	—

Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:									Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Foreign currency forward contracts	627			—			9		Foreign currency forward contracts		957			21			2
Total derivatives	Total derivatives	$	1,596		$	35		$	9	Total derivatives		$	2,110		$	58		$	2

Table of Contents


	December 31, 2021
	Notional Amount		Fair Value
			Asset (1)		Liability (2)
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contracts	$	565	$	20	$	—

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	$	1,370	$	1	$	7
Total derivatives	$	1,935	$	21	$	7

_________

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

(2) As presented in the condensed consolidated balance sheets within other current liabilities.

Gains on our foreign currency derivatives, net of tax, recognized in our condensed consolidated statements of comprehensive income for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 were as follows (in millions):


	Three Months Ended March 31, 2022
~~Derivatives in cash flow hedging relationships:~~
~~Foreign currency forward contracts~~	$	25


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Derivatives in cash flow hedging relationships:
Foreign currency forward contracts	$	46	$	21	$	71	$	21

The effect of our foreign currency derivatives in our condensed consolidated statements of income for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 was as follows (in millions):


									Three Months Ended June 30,				Six Months Ended June 30,
		Statement of Income Classification	Three Months Ended March 31, 2022		Three Months Ended March 31, 2021			Statement of Income Classification	2022		2021		2022		2021
Derivatives in cash flow hedging relationships:	Derivatives in cash flow hedging relationships:						Derivatives in cash flow hedging relationships:
Foreign currency forward contracts	Foreign currency forward contracts						Foreign currency forward contracts
Net gain reclassified from AOCI into income	Net gain reclassified from AOCI into income	Product sales	$	14	$	—	Net gain reclassified from AOCI into income	Product sales	$	30	$	—	$	44	$	—

Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:						Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Foreign currency forward contracts						Foreign currency forward contracts
Net realized and unrealized gain		Other expense, net	$	28	$	35
Net realized and unrealized gain (loss)							Net realized and unrealized gain (loss)	Other expense, net	$	41	$	(54)	$	69	$	(19)

We had immaterial gains reclassified from AOCI to product sales during the three and six months ended June 30, 2021. There were no cash flow hedging activities for the three and six months ended ~~March 31,~~June 30, 2021.

Table of Contents

8. Inventory

Inventory as of ~~March 31,~~June 30, 2022 and December 31, 2021 consisted of the following (in millions):


		March 31,		December 31,			June 30,		December 31,
		2022		2021			2022		2021
Raw materials	Raw materials	$	1,072	$	870	Raw materials	$	1,400	$	870
Work in progress	Work in progress	513		338		Work in progress	379		338
Finished goods	Finished goods	357		233		Finished goods	142		233
Total inventory	Total inventory	$	1,942	$	1,441	Total inventory	$	1,921	$	1,441

Inventory is recorded at the lower of cost or net realizable value. On a quarterly basis, we evaluate the composition of inventory to identify excess, obsolete, slow-moving or otherwise unsaleable items. We also assess whether we have any excess firm, non-cancelable, purchase commitment liabilities, resulting from our supply agreements with third-party vendors on a quarterly basis. The determination of net realizable value of inventory and firm purchase commitment liabilities requires judgment, including consideration of many factors, such as estimates of future product demand, current and future market conditions, potential product obsolescence, expiration and utilization of raw materials under firm purchase commitments and contractual minimums, among others.

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 income. For the three and six months ended ~~March 31,~~June 30, 2022, inventory write-downs were ~~$189~~$499 million and $689 million, respectively. Inventory write-downs were immaterial for the three and six months ended June 30, 2021. For the three and six months ended June 30, 2022, losses on firm purchase commitments ~~recorded as an~~were $184 million and $342 million, respectively. As of June 30, 2022, the accrued liability for losses on firm future purchase commitments in our condensed consolidated balance sheets was $342 million. There were ~~$159 million. Such~~no such charges ~~were immaterial for the three months ended March~~in 2021 or accrued liabilities at December 31, 2021.

Pre-launch Inventory

Costs relating to raw materials and production of inventory in preparation for product launch prior to regulatory approval are capitalized when future commercialization is considered probable, the future economic benefit is expected to be realized, and we believe that material uncertainties related to the ultimate regulatory approval have been significantly reduced. For pre-launch inventory that is capitalized, we consider a number of factors based on the information available at the time, including the product candidate’s current status in the drug development and regulatory approval process, results from the related clinical trials, results from meetings with relevant regulatory agencies prior to the filing of regulatory applications, potential impediments to the approval process such as product safety or efficacy, historical experience, viability of commercialization and market trends.

As of June 30, 2022, we had capitalized pre-launch inventory relating to our Omicron-containing booster candidate (mRNA-1273.214) of $155 million in our condensed consolidated balance sheets.

Table of Contents

9. Property and Equipment, Net

Property and equipment, net, as of ~~March 31,~~June 30, 2022 and December 31, 2021 consisted of the following (in millions):


		March 31,		December 31,			June 30,		December 31,
		2022		2021			2022		2021
Manufacturing and laboratory equipment	Manufacturing and laboratory equipment	$	179	$	175	Manufacturing and laboratory equipment	$	201	$	175
Leasehold improvements	Leasehold improvements	353		313		Leasehold improvements	365		313
Furniture, fixtures and other	Furniture, fixtures and other	16		11		Furniture, fixtures and other	17		11
Computer equipment and software	Computer equipment and software	18		16		Computer equipment and software	17		16
Internally developed software	Internally developed software	8		9		Internally developed software	8		9
Right-of-use asset, financing (Note 11)	Right-of-use asset, financing (Note 11)	951		857		Right-of-use asset, financing (Note 11)	898		857
Construction in progress	Construction in progress	247		212		Construction in progress	284		212
Total	Total	1,772		1,593		Total	1,790		1,593
Less: Accumulated depreciation	Less: Accumulated depreciation	(431)		(352)		Less: Accumulated depreciation	(466)		(352)
Property and equipment, net	Property and equipment, net	$	1,341	$	1,241	Property and equipment, net	$	1,324	$	1,241

Depreciation and amortization expense for the three and six months ended ~~March 31,~~June 30, 2022 was $76 million and $155 million, respectively. Depreciation and amortization expense for the three and six months ended June 30, 2021 was ~~$79~~$69 million and ~~$15~~$84 million, respectively.

~~Table of Contents~~

10. Other Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets, as of ~~March 31,~~June 30, 2022 and December 31, 2021 consisted of the following (in millions):


		March 31,		December 31,			June 30,		December 31,
		2022		2021			2022		2021
Down payments for materials and supplies	Down payments for materials and supplies	$	396	$	287	Down payments for materials and supplies	$	474	$	287
Down payments to manufacturing vendors	Down payments to manufacturing vendors	234		118		Down payments to manufacturing vendors	183		118
Prepaid services	Prepaid services	205		126		Prepaid services	110		126
Value added tax receivable	Value added tax receivable	104		70		Value added tax receivable	45		70
Tenant improvement allowance receivable	Tenant improvement allowance receivable	51		51		Tenant improvement allowance receivable	51		51
Interest receivable	Interest receivable	36		27		Interest receivable	57		27
Derivative assets	Derivative assets	35		21		Derivative assets	58		21
Prepaid income tax		23		—

Other current assets	Other current assets	36		28		Other current assets	76		28
Prepaid expenses and other current assets	Prepaid expenses and other current assets	$	1,120	$	728	Prepaid expenses and other current assets	$	1,054	$	728

Table of Contents

Accrued Liabilities

Accrued liabilities, as of ~~March 31,~~June 30, 2022 and December 31, 2021 consisted of the following (in millions):


		March 31,		December 31,			June 30,		December 31,
		2022		2021			2022		2021
Clinical trials	Clinical trials	$	288	$	283	Clinical trials	$	324	$	283
Raw materials	Raw materials	228		260		Raw materials	317		260
Royalties	Royalties	207		241		Royalties	158		241
Development operations	Development operations	87		137		Development operations	65		137
Manufacturing	Manufacturing	275		227		Manufacturing	244		227
Other external goods and services	Other external goods and services	174		79		Other external goods and services	100		79
Loss on future firm purchase commitments(1)	Loss on future firm purchase commitments(1)	159		—		Loss on future firm purchase commitments(1)	342		—
Compensation-related	Compensation-related	74		126		Compensation-related	128		126
Other	Other	116		119		Other	102		119

Accrued liabilities	Accrued liabilities	$	1,608	$	1,472	Accrued liabilities	$	1,780	$	1,472

______

(1) Related to losses that are expected to arise from firm, non-cancellable, commitments for future raw material purchases (Note 8).

Other Current Liabilities

Other current liabilities, as of ~~March 31,~~June 30, 2022 and December 31, 2021 consisted of the following (in millions):

March 31, December 31,
2022 2021
Lease liabilities - financing (Note 11)
$ 160 $ 165
Lease liabilities - operating (Note 11)
46 46
Other 34 14
Other current liabilities $ 240 $ 225

~~Table of Contents~~


	June 30,		December 31,
	2022		2021
Lease liabilities - financing (Note 11)	$	121	$	165
Lease liabilities - operating (Note 11)	38		46

Other	250		14
Other current liabilities	$	409	$	225

Deferred Revenue

The following table summarizes the activities in deferred revenue for the ~~three~~six months ended ~~March 31,~~June 30, 2022 (in millions):


		December 31, 2021		Additions		Deductions		March 31, 2022			December 31, 2021		Additions		Deductions		June 30, 2022
Product sales	Product sales	$	6,658	$	1,755	$	(2,548)	$	5,865	Product sales	$	6,658	$	1,834	$	(4,166)	$	4,326
Grant revenue	Grant revenue	6		—		—		6		Grant revenue	6		—		(1)		5
Collaboration revenue	Collaboration revenue	204		3		(15)		192		Collaboration revenue	204		6		(43)		167
Total deferred revenue	Total deferred revenue	$	6,868	$	1,758	$	(2,563)	$	6,063	Total deferred revenue	$	6,868	$	1,840	$	(4,210)	$	4,498

11. Leases

We have entered into various long-term non-cancelable lease arrangements for our facilities and equipment expiring at various times through 2042. Certain of these arrangements have free rent periods or escalating rent payment provisions. We recognize lease cost under such arrangements on a straight-line basis over the life of the ~~leases.~~lease. We have 2 campuses in Massachusetts, our Cambridge campus and our Moderna Technology Center (MTC), an industrial technology center located in Norwood. We also lease other office and lab spaces globally for our business operations.

Table of Contents

Operating Leases

Cambridge Campus

We occupy a multi-building campus in Technology Square in Cambridge, Massachusetts with a mix of offices and research laboratory space totaling approximately 261,000 square feet. Our Cambridge campus leases have expiry ranges from 2024 to 2029.

In addition, we are investing in a new Moderna Science Center (MSC) in Cambridge, to create a purpose-built space to support our next chapter of discovery (see Note 12). In connection with our MSC investment, in September 2021, we entered into amendments to our lease agreements to allow for an option for early termination of the leases, either in part or full. Notification of the intent to exercise the option must be provided by August 2023. We have not elected to exercise this option.

Finance Leases

Moderna Technology Center

Our MTC comprises 3 main buildings: MTC South, MTC North and MTC East. Each of ~~the~~ MTC South and ~~the~~ MTC North is approximately 200,000 square feet and provides office, laboratory and light manufacturing space, directly supporting improvement in our manufacturing capabilities. ~~The~~ MTC East is approximately 240,000 square feet for ~~expansion of our~~ commercial and clinical activities. The MTC campus is leased through 2042 and we have the option to extend the term for 3 extension periods of five years.

Embedded Leases

We have entered into multiple contract manufacturing service agreements with third parties which contain embedded leases within the scope of ASC 842. These leases expire from 2022 through 2023. As of ~~March 31,~~June 30, 2022 and December 31, 2021, we had lease liabilities of ~~$173~~$129 million and $166 million, respectively, related to the embedded leases. As of ~~March 31,~~June 30, 2022 and December 31, 2021, we had right-of-use assets of ~~$171~~$101 million and $173 million, ~~respectively.~~respectively, related to the embedded leases.

~~Table of Contents~~

Operating and financing lease right-of-use assets and lease liabilities as of ~~March 31,~~June 30, 2022 and December 31, 2021 were as follows (in millions):


		March 31,		December 31,			June 30,		December 31,
		2022		2021			2022		2021
Assets:	Assets:					Assets:
Right-of-use assets, operating, net (1) (2)	Right-of-use assets, operating, net (1) (2)	$	132	$	142	Right-of-use assets, operating, net (1) (2)	$	122	$	142
Right-of-use assets, financing, net (3) (4)	Right-of-use assets, financing, net (3) (4)	693		665		Right-of-use assets, financing, net (3) (4)	619		665
Total	Total	$	825	$	807	Total	$	741	$	807

Liabilities:	Liabilities:					Liabilities:
Current:	Current:					Current:
Operating lease liabilities (5)	Operating lease liabilities (5)	$	46	$	46	Operating lease liabilities (5)	$	38	$	46
Financing lease liabilities (5)	Financing lease liabilities (5)	160		165		Financing lease liabilities (5)	121		165
Total current lease liabilities	Total current lease liabilities	206		211		Total current lease liabilities	159		211
Non-current:	Non-current:					Non-current:
Operating lease liabilities, non-current	Operating lease liabilities, non-current	95		106		Operating lease liabilities, non-current	87		106
Financing lease liabilities, non-current	Financing lease liabilities, non-current	646		599		Financing lease liabilities, non-current	641		599
Total non-current lease liabilities	Total non-current lease liabilities	$	741	$	705	Total non-current lease liabilities	$	728	$	705
Total	Total	$	947	$	916	Total	$	887	$	916

_______

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

(2) Net of accumulated amortization.

(3) These assets are real estate assets related to the MTC leases as well as assets related to contract manufacturing service agreements.

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

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

Table of Contents

Future minimum lease payments under our non-cancelable lease agreements as of ~~March 31,~~June 30, 2022, were as follows (in millions):


Fiscal Year	Fiscal Year		Operating Leases		Financing Leases (1)		Fiscal Year		Operating Leases			Financing Leases (1)
2022	2022	(remainder of the year)	$	41	$	169		2022	(remainder of the year)	$	23		$	121
2023	2023		39		39			2023		39			38
2024	2024		15		21			2024		15			21
2025	2025		16		22			2025		16			22
2026	2026		16		22			2026		16			22
Thereafter	Thereafter		51		1,111			Thereafter		51			1,111
Total minimum lease payments	Total minimum lease payments		178		1,384			Total minimum lease payments		160			1,335
Less amounts representing interest or imputed interest	Less amounts representing interest or imputed interest		(37)		(578)			Less amounts representing interest or imputed interest		(35)			(573)
Present value of lease liabilities	Present value of lease liabilities		$	141	$	806		Present value of lease liabilities		$	125		$	762

______

(1) Includes certain optional lease term extensions, predominantly related to the MTC leases, which represent a total of $662 million of undiscounted future lease payments.

12. Commitments and Contingencies

Legal Proceedings

We are involved in various claims and legal proceedings of a nature considered ordinary course in our business. The outcome of any such proceedings, regardless of the merits, is inherently uncertain; therefore, assessing the likelihood of loss and any estimated damages is difficult and subject to considerable judgment. We are not currently a party to any legal proceedings for which a material loss is probable, or for which a loss is reasonably estimable at this time.

~~Table of Contents~~

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.

Table of Contents

Through the three and six months ended ~~March 31,~~June 30, 2022 and the year ended December 31, 2021, we had not experienced any material losses related to these indemnification obligations, and no 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, and no related reserves were established.

Purchase Commitments and Purchase Orders

We enter into agreements in the normal course of business with vendors and contract manufacturing organizations ~~(CMOs)~~ for raw materials and manufacturing services and with vendors for preclinical research studies, clinical trials and other goods or services. As of ~~March 31,~~June 30, 2022, we had ~~$2.5~~$3.4 billion of non-cancelable purchase commitments related to raw materials and manufacturing agreements, which are expected to be paid through 2025. As of ~~March 31,~~June 30, 2022, $342 million of the purchase commitments related to raw materials was recorded as an accrued liability for loss on future firm purchase commitments. As of June 30, 2022, we had ~~$190~~$179 million of non-cancelable purchase commitments related to clinical services and other goods and services which are expected to be paid through 2026. These amounts represent our minimum contractual obligations, including termination fees.

In addition to purchase commitments, we have agreements with third parties for various goods and services, including services related to clinical operations and support and contract manufacturing, for which we are not contractually able to terminate for convenience and avoid any and all future obligations to the vendors. Certain agreements provide for termination rights subject to termination fees or wind down costs. Under such agreements, we are contractually obligated to make certain payments to vendors, mainly, to reimburse them for their unrecoverable outlays incurred prior to cancellation. At ~~March 31,~~June 30, 2022, we had cancelable open purchase orders of ~~$3.4~~$2.5 billion in total under such agreements for our significant clinical operations and support and contract manufacturing. These amounts represent only our estimate of those items for which we had a contractual commitment to pay at ~~March 31,~~June 30, 2022, assuming we would not cancel these agreements. The actual amounts we pay in the future to the vendors under such agreements may differ from the purchase order amounts.

Licenses to Patented Technology

On June 26, 2017, we entered into sublicense agreements with Cellscript, LLC and its affiliate, mRNA RiboTherapeutics, Inc., to sublicense certain patent rights. Pursuant to each agreement, we are required to pay certain license fees, annual maintenance fees, minimum royalties on future net sales and milestone payments contingent on achievement of certain development, regulatory and commercial milestones for specified products, on a product-by-product basis. Commercial milestone payments and royalties based on annual net sales of licensed products for therapeutic and prophylactic products are accounted for as additional expense of the related product sales in the period in which the corresponding sales occur. For the three and six months ended ~~March 31,~~June 30, 2022, we recognized $157 million and $364 million, respectively, of royalty expenses associated with our product sales, which was recorded to cost of sales in our condensed consolidated statements of income. For the three and six months ended June 30, 2021, we recognized ~~$207~~$148 million and ~~$84~~$232 million, respectively, of royalty expenses associated with our product sales, which was recorded to cost of sales in our condensed consolidated statements of income.

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 was not deemed probable as of ~~March 31,~~June 30, 2022.

~~Table of Contents~~

Moderna Science Center

In September 2021, we announced an investment in the MSC in Cambridge, Massachusetts. The MSC is expected to integrate scientific and non-scientific spaces, including our principal executive offices, and will be built to support our growth as we continue to advance our pipeline of mRNA medicines. In relation to the investment, we entered into a lease agreement for approximately 462,000 square feet and will undergo an approximately two-year building project. Following the building project, the lease term is 15 years, subject to our right to extend the lease for up to 2 additional seven-year terms. Pursuant to this lease agreement, we are committed to approximately $1.1 billion non-cancellable rent payments for the initial lease term. We expect to begin ~~a phased~~the move-in process in 2023.

Table of Contents

13. Stock-Based Compensation and Share Repurchase Program

Stock-Based Compensation

The following table presents the components and classification of stock-based compensation expense for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 as follows (in millions):


		Three Months Ended March 31,					Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021				2022		2021		2022		2021
Options	Options		$	25	$	22		Options	$	27	$	24	$	52	$	46
Restricted Common Stock (RSUs) and Performance Stock Units (PSUs)	Restricted Common Stock (RSUs) and Performance Stock Units (PSUs)		17		7			Restricted Common Stock (RSUs) and Performance Stock Units (PSUs)	22		10		39		17
Employee Stock Purchase Plan (ESPP)	Employee Stock Purchase Plan (ESPP)		2		1			Employee Stock Purchase Plan (ESPP)	1		1		3		2
Total	Total		$	44	$	30		Total	$	50	$	35	$	94	$	65

Cost of sales	Cost of sales		$	8	$	4		Cost of sales	$	13	$	8	$	21	$	12
Research and development	Research and development		20		14			Research and development	19		15		39		29
Selling, general and administrative	Selling, general and administrative		16		12			Selling, general and administrative	18		12		34		24
Total	Total		$	44	$	30		Total	$	50	$	35	$	94	$	65

As of ~~March 31,~~June 30, 2022, there was ~~$538~~$575 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 3.2 years at ~~March 31,~~June 30, 2022.

Share Repurchase Programs

On August 2, 2021, our Board of Directors authorized a Share Repurchase Program (2021 Repurchase Program) of our common stock. Pursuant to the 2021 Repurchase Program, we were authorized to repurchase up to $1.0 billion of our outstanding common stock, with an expiration date no later than August 2, 2023. By the end of January 2022, we had repurchased the entire $1.0 billion of common stock that was authorized under the 2021 Repurchase Program.

On February 22, 2022, our Board of Directors authorized a new Share Repurchase Program (2022 Repurchase Program) of our common stock, with no expiration date. Pursuant to the 2022 Repurchase Program, we may repurchase up to $3.0 billion of our outstanding common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and other investment opportunities, and shares may be repurchased through open market purchases through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, we repurchased 413 million shares of our common stock under the 2021 ~~Repurchase Program~~ and ~~the~~ 2022 Repurchase Program for an aggregate of ~~$623 million,~~$1.9 billion, including commissions and fees. As of ~~March 31,~~June 30, 2022, there was a total of ~~$2.5~~$1.2 billion remaining for repurchases of our common stock under the 2022 Repurchase Program.

2526

Table of Contents

14. Income Taxes

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


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2022			2021				2022			2021			2022			2021
Income before income taxes	Income before income taxes	$	4,229		$	1,260		Income before income taxes	$	2,474		$	3,063		$	6,703		$	4,323
Provision for income taxes	Provision for income taxes	$	572		$	39		Provision for income taxes	$	277		$	283		$	849		$	322
Effective tax rate	Effective tax rate	13.5		%	3.1		%	Effective tax rate	11.2		%	9.2		%	12.7		%	7.5		%

~~Our~~The effective tax rate for the three and six months ended ~~March 31,~~June 30, 2022 was lower than the U.S. statutory tax rate, primarily due to the benefit of the foreign derived intangible income deduction (FDII) and a discrete item for excess tax benefits related to stock-based compensation. The ~~increase in our~~increased effective tax rate for the three and six months ended ~~March 31,~~June 30, 2022 ~~compared~~was mainly due to the ~~effective~~ tax ~~rate for the same period in 2021 is mainly attributable to the~~ benefit recorded in 2021 related to the release of the valuation allowance on the majority of our deferred tax ~~assets.~~assets, as well as a decrease in excess windfall benefits from stock-based compensation, partially offset by an increase in the FDII benefit in 2022.

We file U.S. federal income tax returns and income tax returns in various state, local and foreign jurisdictions. We are not currently subject to any tax assessment from an income tax examination in the United States or any other major taxing jurisdiction.

Effective January 1, 2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes. Unless modified or repealed, and based on current assumptions, the mandatory capitalization ~~would increase~~increases our cash tax liabilities, but also ~~increase~~increases our ~~foreign-derived intangible income~~FDII deduction resulting in a decrease to our effective tax rate.

15. Earnings per Share

The computation of basic earnings 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.

Basic and diluted EPS for the three and six months ended ~~March 31,~~June 30, 2022 and 2021 were calculated as follows (in millions, except per share data):

Three Months Ended March 31,
2022 2021
Numerator:
Net income $ 3,657 $ 1,221
Denominator:
Basic weighted-average common shares outstanding 402 400
Effect of dilutive securities 24 30
Diluted weighted-average common shares outstanding 426 430
Basic EPS $ 9.09 $ 3.05
Diluted EPS $ 8.58 $ 2.84

The following common stock equivalents, presented based on amounts outstanding as of March 31, 2022 and 2021, were excluded from the calculation of diluted net income per share attributable to common stockholders for the periods presented because their inclusion would have been anti-dilutive (in millions):

Three Months Ended March 31,
2022 2021
Stock options 2 1


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Numerator:
Net income	$	2,197	$	2,780	$	5,854	$	4,001
Denominator:
Basic weighted-average common shares outstanding	396		402		399		401
Effect of dilutive securities	23		29		24		29
Diluted weighted-average common shares outstanding	419		431		423		430

Basic EPS	$	5.55	$	6.93	$	14.66	$	9.98
Diluted EPS	$	5.24	$	6.46	$	13.85	$	9.30

Anti-dilutive potential common shares excluded from the EPS computation above	4		1		3		1

2627

Table of Contents

16. Subsequent Events

On July 28, 2022, we entered into a supply agreement with the U.S. government for an initial 66 million doses of our COVID-19 bivalent booster vaccine candidate (mRNA-1273.222) with options for the U.S. government to purchase up to an additional 234 million doses. On August 1, 2022, the U.S. government exercised an option to purchase 4 million pediatric doses of our COVID-19 bivalent booster vaccine candidate, bringing the total to 70 million doses purchased, with options to purchase an additional 230 million doses.

On August 1, 2022, our Board of Directors authorized a new Share Repurchase Program (2022 Second Repurchase Program) of our common stock, with no expiration date. Pursuant to the 2022 Second Repurchase Program, we may repurchase up to $3.0 billion of our outstanding common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and other investment opportunities, and shares may be repurchased through open market purchases through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934 (the Exchange Act).

Table of Contents

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited financial information and related notes included in this Form 10-Q and our consolidated financial statements and related notes and other financial information in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission (the SEC) on February 25, 2022 (the 2021 Form 10-K). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in Part II, Item 1A - Risk Factors in this Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a biotechnology company pioneering messenger RNA (mRNA) therapeutics and vaccines to create a new generation of transformative medicines to improve the lives of patients. Our platform builds on continuous advances in basic and applied mRNA science, delivery technology, and manufacturing, providing us the capability to pursue in parallel a robust pipeline of new development candidates. We are developing therapeutics and vaccines for infectious diseases, immuno-oncology, rare diseases, autoimmune diseases and cardiovascular diseases, independently and with our strategic collaborators. Within our platform, we develop technologies that enable the development of mRNA medicines for diverse applications. When we identify technologies that we believe could enable a new group of potential mRNA medicines with shared product features, we call that group a “modality.” We have created seven modalities to date:

•prophylactic vaccines;

•systemic secreted and cell surface therapeutics;

•cancer vaccines;

•intratumoral immuno-oncology;

•localized regenerative therapeutics;

•systemic intracellular therapeutics; and

•inhaled pulmonary therapeutics.

On December 18, 2020, we received an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for the emergency use of the Moderna COVID-19 Vaccine (also referred to as mRNA-1273 and marketed under the brand name Spikevax) ~~at the~~as a two-dose, 100 µg ~~dose level~~primary series in individuals 18 years of age or older. ~~Subsequently,~~In January 2022, we ~~have also~~ received ~~authorization~~full commercial approval for ~~our~~Spikevax as a two-dose, 100 µg primary series to prevent COVID-19 ~~vaccine from health agencies~~in individuals 18 years of age and older in the United States, and Spikevax is approved or authorized in individuals 18 years and older in more than ~~70 countries and from the World Health Organization (WHO).~~80 countries. In addition, we have received authorization from the FDA and global regulators in more than 40 countries for our COVID-19 vaccine as a two-dose 100 µg primary series in adolescents aged 12-17 years and as a two-dose 50 µg primary series in children ages 6 through 11 years old. Additionally, a two-dose, 25 µg primary series of our COVID-19 vaccine is authorized in ~~adolescents aged 12-17 years in more than 40 countries. We have received authorization for a two-dose 50 µg primary series of our COVID-19 vaccine in~~young children ages 6 ~~to 11~~months through 5 years old in ~~more than 35 countries.~~ the United States, Canada, Australia, and other jurisdictions.

The FDA, European Medicines Agency (EMA), Swissmedic and other health agencies around the world have authorized a booster dose of our COVID-19 vaccine at the 50 µg dose level for adults ages 18 years and older.

~~Business Highlights and Recent Development~~

~~Moderna COVID-19 Vaccine~~

•~~Moderna COVID-19 Vaccine (mRNA-1273, Spikevax):~~ In January 2022, we received full commercial approval for Spikevax to prevent COVID-19 in individuals 18 years of age and older in the United States. Spikevax also has full commercial approval in individuals 18 years of age and older in Canada and the United Kingdom, and is ~~approved or authorized in individuals 18 years and older in more than 70 countries (100 µg dose).~~

In March 2022, ~~we received approval from~~ the FDA ~~to amend our EUA to allow for~~and other health agencies authorized a second booster dose ~~of our COVID-19 vaccine~~ at the 50 µg dose level infor adults 50 years ~~of age~~ and older ~~who have received an initial booster of any of the authorized or approved COVID-19 vaccines~~ and adults over 18 years of age ~~and older~~ with certain kinds of immunocompromise.

•~~For the first quarter of 2022, we recognized product sales of $5.9 billion from sales of our COVID-19 vaccine, compared to $1.7 billion in the first quarter of 2021.~~Business Highlights and Recent Developments

•~~Moderna COVID-19 Vaccine for adolescents and children:~~ In adolescents aged 12-17 years, the primary series (2 dose, 100 µg) of our COVID-19 vaccine is authorized in more than 40 countries. We made the decision to evaluate the potential of a two-dose 50 µg primary series to meet regulatory guidance for immunogenicity in adolescents. We are preparing to submit data for 50 µg COVID-19 boosters in this age group.

~~Table of Contents~~

In children aged 6-11 years, the primary series (2 dose series, 50 ��g) of our COVID-19 vaccine is authorized in more than 35 countries, including Australia, Canada and the EU. We are evaluating a 25 µg dose as a primary series and a booster dose in this age group.

In March 2022, we announced the Phase 2/3 KidCOVE study in children 6 months to under 6 years successfully met its primary endpoint. This interim analysis showed a robust neutralizing antibody response in both age groups after a two-dose 25 µg primary series of mRNA-1273 along with a favorable safety profile. Based on these data, in April 2022, we submitted an EUA request to the FDA for authorization of a two-dose 25 μg primary series of mRNA-1273 for children 6 months to under 6 years of age. Similar requests are underway with international regulatory authorities.

~~Additional~~ Moderna COVID-19 Vaccine Clinical Studies

•Omicron-specific booster ~~candidate (mRNA-1273.529)~~candidates (mRNA-1273.529/.214/.222): Our ~~Omicron-specific booster candidate is~~Omicron-containing vaccine candidates are being studied to evaluate the immunogenicity, safety and reactogenicity of mRNA-1273.529 and mRNA-1273.214 as a single booster dose in adults aged 18 years and ~~older~~older. mRNA-1273.529 is a vaccine candidate specific to the Omicron variant of concern (BA.1).mRNA-1273.214 is a bivalent candidate that combines our Omicron-specific (BA.1) candidate (mRNA-1273.529) and mRNA-1273. We are also developing a bivalent vaccine candidate (mRNA-1273.222) based upon the BA.4/5 Omicron variant strains and mRNA-1273. mRNA-1273.214 is being evaluated in ~~two cohorts: individuals who previously received~~an ongoing registrational, Phase 2/3 study in the ~~two-dose primary series~~U.S. and a Phase 3 study in the UK. We expect to begin dosing with mRNA-1273.222 in the U.S. Phase 2/3 study soon.

Table of ~~mRNA-1273 with the second dose being at least six months ago (cohort 1), or individuals who have received the two-dose primary series and~~Contents

•Based on our June 2022 clinical data, a 50 µg booster dose of mRNA-1273.214 met all pre-specified endpoints including superior neutralizing antibody response (geometric mean ratio) against the Omicron variant one month after administration when compared to the original mRNA-1273 ~~with the booster dose being at least three months ago (cohort 2). Participants in both cohorts will receive a single~~vaccine. The booster dose of ~~mRNA-1273.529. In~~mRNA-1273.214 was generally well-tolerated, with side effects comparable to a booster dose of mRNA-1273 at the ~~U.S.,~~50 µg dose level. Additionally, one month after administration in previously vaccinated and boosted participants, a ~~Phase 2 study~~50 µg booster dose of mRNA-1273.214 elicited potent neutralizing antibody responses against the ~~Omicron-specific~~Omicron subvariants BA.4 and BA.5 in all participants regardless of prior infection. We are working to complete regulatory submissions in the coming weeks requesting to update the composition of our booster ~~candidate (mRNA-1273.529) as~~vaccine to mRNA-1273.214.

•We are advancing both mRNA-1273.214 and mRNA-1273.222 for fall 2022 based on different market needs for Omicron subvariants. On July 28, 2022, we entered into a ~~third or fourth dose is fully enrolled.~~supply agreement with the U.S. government for an initial 66 million doses of mRNA-1273.222, with options for the U.S. government to purchase up to an additional 234 million doses. We also have supply agreements with other governments for the supply of mRNA-1273.214 for the fall booster season.

•Beta-specific bivalent booster (mRNA-1273.211): mRNA-1273.211 ~~includes~~is a bivalent vaccine candidate that combines our Beta-specific candidate (mRNA-1273.351) and mRNA-1273. Several mutations found in the Beta variant of concern ~~several of which~~ have been persistent in more recent variants of concern, including Omicron. A 50 µg booster dose of mRNA-1273.211 demonstrated superiority compared to a 50 µg booster dose of mRNA-1273 against Beta, Delta and Omicron variants of concern one month after administration. Superiority continued six months after administration for Beta and Omicron variants of concern as well. A 50 µg booster dose of mRNA-1273.211 was generally well tolerated with a reactogenicity profile comparable to a booster dose of mRNA-1273 at the 50 µg dose level.

•~~Omicron-specific bivalent booster candidate (mRNA-1273.214):~~Moderna COVID-19 Vaccine for adolescents and children: ~~mRNA-1273.214 is a bivalent candidate that combines Moderna’s Omicron-specific candidate (mRNA-1273.529) and mRNA-1273. mRNA-1273.214 is being evaluated in a Phase 2/3 study, and~~In adolescents aged 12-17 years, the ~~first participant was dosed in March 2022. We expect initial data on mRNA-1273.214 in June 2022 to inform selection~~primary series (two doses of 100 µg) of our ~~candidate for the Northern Hemisphere fall 2022 booster.~~COVID-19 vaccine is authorized in more than 40 countries.

In children aged 6-11 years, the ~~United Kingdom, enrollment is ongoing in a Phase 3 to evaluate Omicron-containing candidates as a third or fourth dose in individuals who received any~~ primary series (two doses of 50 µg) of our COVID-19 vaccine is authorized in more than 40 countries, including the U.S., the EU, Australia, and Canada.

In children aged 6 months to 5 years, the primary series (two doses of 25 µg) of our COVID-19 ~~vaccinations from~~vaccine is authorized in the U.S., Canada, Australia, and other ~~manufacturers.~~jurisdictions.

•Next-generation vaccine candidate against COVID-19 (mRNA-1283): mRNA-1283 is a next-generation vaccine candidate against COVID-19 and is being developed as a potential refrigerator-stable mRNA vaccine that will facilitate easier distribution and administration by healthcare providers. In a Phase 1 study of mRNA-1283, preliminary results indicate that when administered as primary series at lower dose levels (10 µg, 30 µg), mRNA-1283 elicits a robust anti-SARS-CoV-2 neutralizing antibody response comparable to the 100 µg mRNA-1273 primary series. The frequency of local and systemic solicited adverse reactions of the mRNA-1283 primary series administered at lower dose levels (10 µg, 30 µg) was overall comparable to mRNA-1273. Enrollment is complete in a Phase 2 study evaluating booster doses of mRNA-1283, mRNA-1283.211 (SARS-CoV-2/Beta bivalent), and mRNA-1283.529 (Omicron monovalent).

•For the second quarter of 2022, we recognized product sales of $4.5 billion from sales of our COVID-19 vaccine, compared to $4.2 billion in the second quarter of 2021.

Other Business Updates

In March 2022, we announced an expansion of our mRNA pipeline with two new development programs. This announcement reflects our commitment to expanding our portfolio by building on our experience with our COVID-19 vaccine. The first development program is a new combination respiratory vaccine candidate (mRNA-1230) to target three of the most significant viruses causing respiratory disease in older adults—SARS-CoV-2, influenza and respiratory syncytial virus (RSV). The second is a program to develop a vaccine candidate (mRNA-1287) against endemic human coronaviruses (HCoVs). While less-well known than other coronaviruses, HCoVs are a significant cause of respiratory disease worldwide. Four HCoVs (HCoV-229E, -NL63, -OC43, and -HKU1) are endemic globally, accounting for approximately 10% to 30% of upper respiratory tract infections in adults.

~~In March~~June 2022, we entered into ~~a Memorandum of Understanding~~an agreement in principle with the United Kingdom government to establish an mRNA Innovation and Technology Center in the United Kingdom. We expect this state-of-the-art mRNA vaccine manufacturing facility to provide access to rapid pandemic response capabilities and our respiratory virus vaccine candidates. Additionally, we plan to expand our presence in the United Kingdom through investments in research and development activities. The UK agreement follows previous agreements entered into with the Government of the Republic of Kenya, the Australian Federal Government and the Government of Canada to establish ~~Kenya as the location for our mRNA manufacturing facility, with the assistance of the U.S. Government. We expect to build a~~ state-of-the-art mRNA ~~facility~~vaccine manufacturing facilities in Kenya with the goal of producing up to 500 million doses of vaccines each year. We anticipate investing up to $500 million in this new facility which will focus on drug substance manufacturing on the continent of Africa for the continent of Africa,those countries.

2830

Table of Contents

and could also be expanded to include fill/finish and packaging capabilities at the site. In parallel, we are also working on plans to allow us to fill doses of our COVID-19 vaccine in Africa as early as 2023, subject to demand.

In March 2022, we executed a strategic partnership agreement with the Australian Federal Government to establish a state-of-the-art, mRNA vaccine manufacturing facility in Australia. The facility, when constructed, is expected to provide people in Australia with access to a domestically manufactured portfolio of mRNA vaccines against respiratory viruses, including COVID-19, seasonal influenza, RSV, and other potential respiratory viruses, pending licensure. As part of this strategic partnership, we expect to support Australia’s mRNA research, development, and industry ecosystem, including engagement with collaborative research partnerships with Australian institutions and establishing a Regional Research Center for respiratory medicines and tropical diseases.

In April 2022, we announced plans for a long-term strategic collaboration with the Government of Canada to establish a state-of-the-art mRNA vaccine manufacturing facility in Canada. The collaboration is expected to be finalized following approval of the final agreement by the Government of Canada. The facility, when constructed, is expected to provide people in Canada with access to a domestically manufactured portfolio of mRNA vaccines against respiratory viruses, including COVID-19, seasonal influenza, RSV, and other potential respiratory viruses, pending licensure. As part of this strategic collaboration, we expect to support research and development and other commercial collaborations in Canada.

In March 2022, we announced our global public health strategy through three new initiatives aimed at advancing mRNA vaccines for the prevention of infectious diseases. First, we announced a commitment to advance vaccines targeting 15 priority pathogens into clinical studies by 2025. We expect to prioritize HIV, tuberculosis (TB), malaria, neglected tropical diseases, and priority pathogens of the WHO and the Coalition for Epidemic Preparedness Innovations (CEPI). Second, to accelerate research with the aim of advancing additional vaccines, we are launching a new program, ~~mRNA Access~~, that will offer researchers use of our mRNA technology to explore new vaccines against emerging or neglected infectious disease. Third, we have expanded our pledge to never enforce our patents for COVID-19 vaccines against manufacturers in 92 low- and middle-income countries in the Gavi COVAX Advance Market Commitment (AMC), provided that these vaccines are manufactured solely for use in these countries. We remain willing to license our technology for COVID-19 vaccines to manufacturers in countries outside of the AMC 92 on commercially reasonable terms.

Key Updates for our Other Development Candidates

•Seasonal influenza (flu) (mRNA-1010, mRNA-1011, mRNA-1012, mRNA-1020 and mRNA-1030): As part of our influenza vaccine development strategy, we are developing five different influenza vaccines. mRNA-1010 is a single investigational vaccine consisting of four distinct mRNA sequences that encode the A H1N1, H3N2 and influenza B Yamagata and Victoria lineages in our proprietary LNP. mRNA-1011 and mRNA-1012 are investigational vaccines that will include the four WHO-recommended strains and aim to add additional hemagglutinin (HA) antigens (e.g. H3N2, H1N1). mRNA-1020 and mRNA-1030 are investigational vaccines that will aim to add neuraminidase (NA) antigens.

In March 2022, an interim analysis of a Phase 2 study of mRNA-1010 identified no significant safety concerns, and the immunogenicity data is consistent with a potential for superiority to standard dose vaccine for influenza A strains (which drives the majority of disease in adults). The interim data is consistent with potential for non-inferiority to standard dose vaccine in influenza B strains (primarily a concern in pediatrics). ~~We plan on starting~~In June 2022, the first participants were dosed in a Phase 3 safety and immunogenicity study of ~~mRNA-1010~~mRNA-1010. We expect to enroll approximately 6,000 adults in ~~the~~ Southern Hemisphere ~~in in 2022, and~~countries. Further, we are preparing for a Phase 3 efficacy study in fall 2022 if needed.

In April, we announced that the Phase 11/2 trial of mRNA-1020 and mRNA-1030 dosed its first ~~participants.~~participants, and the trial is now fully enrolled. The Phase 1/2 randomized, observer-blind, dose-ranging study will evaluate the safety, reactogenicity and immunogenicity of a single dose of mRNA-1020 or mRNA-1030 in healthy adults 18 years and older in the U.S. mRNA-1020 and mRNA-1030 candidates each include eight mRNAs, targeting both hemagglutinin and neuraminidase at different doses and ratios.

•Respiratory syncytial virus (RSV) vaccine (mRNA-1345): mRNA-1345 is a vaccine against RSV encoding for a prefusion F glycoprotein, which elicits a superior neutralizing antibody response compared to the postfusion state. The Phase 1 study of mRNA-1345 to evaluate the tolerability, reactogenicity and immunogenicity of mRNA-1345 in younger adults, older adults, women of child-bearing age, older adults of Japanese descent and children is ongoing. All cohorts are fully enrolled except the RSV seropositive children cohort, which is ongoing. ~~Dosing in the older adults of Japanese descent (≥ 60 years) and children cohorts are ongoing.~~ Phase 1 interim data from the older adult cohort showed that a single mRNA-1345 vaccination at 50 µg, 100 µg or 200 µg boosted neutralizing antibody titers against RSV-A by approximately 14-fold and against RSV-B by approximately 10-fold. The Phase 3 portion of the pivotal global Phase 2/3 study of mRNA-1345 with approximately 34,000 participants is currently enrolling. Additionally, a Phase 3 study to evaluate the safety, tolerability and immunogenicity of mRNA-1345, when given alone or co-administered with a seasonal influenza vaccine, in adults 50 years of age or older is fully enrolled. The FDA has granted Fast Track designation for mRNA-1345 in adults older than 60 years of age.

29•Combined COVID and flu vaccine (mRNA-1073): mRNA-1073 is a combination vaccine that encodes for the COVID spike protein and the influenza HA glycoproteins. A Phase 1/2 study comparing mRNA-1073 to co-administered mRNA-1010 and mRNA-1273, and to mRNA-1010 and mRNA-1273 alone is ongoing in approximately 1,050 participants aged 18-75 years, and the trial is fully enrolled.

~~Table of Contents~~

•HIV vaccines (mRNA-1644 & mRNA-1574): We are currently advancing two HIV preventative vaccine strategies based on germline targeting and immune-focusing approaches. Our mRNA-1644 program is designed to test the hypothesis that sequential administration of priming and boosting HIV immunogens delivered by mRNA can induce specific classes of B-cell responses and guide their early maturation toward broadly neutralizing antibody (bnAb) development. The induction of bnAbs is widely considered to be a goal of HIV vaccination, and this is the first step in that process. The immunogens being tested in IAVI G002 were developed by scientific teams at IAVI and Scripps Research and will be delivered via Moderna’s mRNA technology. The Phase 1 trial sponsored by IAVI and supported by the Gates Foundation is ongoing. In addition, we are also advancing an HIV trimer mRNA vaccine trial of mRNA-1574. The primary hypothesis is that the soluble and membrane-bound HIV envelope trimer mRNA vaccines will be safe and well-tolerated by HIV-uninfected individuals and will elicit autologous neutralizing antibodies. The Phase 1 trial is ongoing and is sponsored and funded by the Division of AIDS (DAIDS) of the National Institute of Allergy and Infectious Diseases (NIAID) within the National Institutes of Health (NIH).

•Nipah vaccine (mRNA-1215): ~~We received a safe to proceed from the FDA for~~The first participants in a Phase 1 study of mRNA-1215, our vaccine candidate against the Nipah virus (NiV)., were dosed in July 2022. The trial is sponsored and funded by the NIAID. mRNA-1215 was co-developed along with the NIH’s Vaccine Research Center, and the Phase 1 clinical testing ~~will be~~is focused on pandemic preparedness.

Table of Contents

•Propionic acidemia (PA) (mRNA-3927): The Phase 1/2 clinical trial for mRNA-3927, our therapy for the treatment of propionic acidemia, or PA, is ongoing, and the ~~first~~second cohort is fully enrolled. We are enrolling other patients into additional cohorts. ~~All five patients eligible for the Open Label Extension (OLE) study have elected to participate.~~ The Phase 1/2 study is designed to evaluate the safety and tolerability of mRNA-3927 in patients with PA. PA, is a rare, life-threatening, inherited metabolic disorder due to a defect in the mitochondrial enzyme propionyl-CoA carboxylase (PCC). It primarily affects the pediatric population. There is no approved therapy for PA, including no approved enzyme replacement therapy. We have received Rare Pediatric Disease Designation and Orphan Drug Designation from the FDA and Orphan Drug Designation from the European Commission for the PA program. The FDA has also granted Fast Track designation to mRNA-3927. This is the first development candidate to enter the clinic in our intracellular therapeutics modality.

•Methylmalonic acidemia (MMA) (mRNA-3705): The Phase 1/2 clinical trial for mRNA-3705, our therapy for the treatment of methylmalonic acidemia, or MMA, is ongoing and the first cohort has been fully enrolled. The study is now open in the UK, Canada and the U.S. Moderna is enrolling patients into additional cohorts. The ~~one patient eligible to participate in the OLE study has elected to participate. The~~ Phase 1/2 study is designed to evaluate the safety and tolerability of mRNA-3705 in patients with MMA. MMA is a rare, life-threatening, inherited metabolic disorder that is primarily caused by a defect in the mitochondrial enzyme methylmalonyl-coenzyme A mutase, or MUT. It primarily affects the pediatric population. There is no approved therapy that addresses the underlying disorder, including no approved enzyme replacement therapy, due to the complexity of the protein and its mitochondrial localization.

•Glycogen storage disease type 1a (GSD1a) (mRNA-3745): ~~The FDA has granted~~In June 2022, the first participant in the Phase 1 study of our GSD1a therapeutic candidate, mRNA-3745, ~~Orphan Drug Designation and completed its review of the IND application allowing it to proceed to clinic.~~was dosed. Individuals with GSD1a have a deficiency in glucose-6-phosphatase resulting in pathological blood glucose imbalance. mRNA-3745 is an IV-administered mRNA encoding human G6Pase enzyme, designed to restore the deficient or defective intracellular enzyme activity in patients with GSD1a. The FDA has granted mRNA-3745 Orphan Drug Designation.

•IL-12 (MEDI1191): AstraZeneca is leading the early clinical development and an ongoing, open-label multicenter Phase 1 clinical trial of intratumoral injections of MEDI1191 alone and in combination with the checkpoint inhibitor, durvalumab. In April 2022, AstraZeneca presented updated Phase 1 data at the American Association for Cancer Research (AACR) conference. Intratumoral MEDI1191 combined with durvalumab was safe and the combination showed preliminary evidence of clinical benefit, with 29% of patients exhibiting partial responses or stable disease ≥12 weeks as best overall response.

•Personalized cancer vaccine (mRNA-4157): Our personalized cancer vaccine, or PCV, is currently being evaluated in a Phase 1 and Phase 2 study. The randomized, placebo-controlled Phase 2 study investigating a 1 mg dose of mRNA-4157 in combination with Merck’s pembrolizumab (KEYTRUDA®), compared to pembrolizumab alone, for the adjuvant treatment of high-risk resected melanoma is fully enrolled (n=150). The primary endpoint of the Phase 2 study is recurrence-free survival at 12 months. The Phase 1 in multiple cohorts is ~~ongoing and the expanded head and neck cohort is recruiting additional patients.~~ongoing. Moderna shares worldwide commercial rights to mRNA-4157 with Merck.

3032

Table of Contents

Our Pipeline

The following chart shows our current pipeline of 46 development programs, grouped by respiratory vaccines, latent & public health vaccines and therapeutics.

Abbreviations: AZ, AstraZeneca; BARDA, Biomedical Advanced Research and Development Authority; CMV, Cytomegalovirus; DARPA, Defense Advanced Research Projects Agency; EBV, Epstein-Barr virus; HIV, human immunodeficiency virus; hMPV, human metapneumovirus; ILCM, Institute for Life Changing Medicines; ~~IL-2, interleukin 2;~~ IL-12, interleukin 12; IL-23, interleukin 23; IL-36γ, interleukin-36 gamma; NIH, National Institutes of Health; OX40L, wildtype OX40 ligand; RSV, respiratory syncytial virus; VEGF-A, vascular endothelial growth factor A.

3133

Table of Contents

We have developed seven modalities, which are summarized as follows:

•Prophylactic vaccines: Our prophylactic vaccines modality currently includes 3132 development programs, 2123 of which have entered into clinical trials. We have ongoing Phase 1 trials for our RSV vaccine in pediatrics (mRNA-1345), flu vaccines (mRNA-1020 and mRNA-1030), combined COVID and flu vaccine (mRNA-1073), hMPV/PIV3 vaccine (mRNA-1653), EBV vaccine (mRNA-1189) ~~and~~, HIV vaccines (mRNA-1644 and mRNA-1574) and Nipah vaccine (mRNA-1215). We have an ongoing Phase 2 ~~studies~~study for our ~~flu vaccine (mRNA-1010) and~~ Zika vaccine (mRNA-1893). We have ongoing Phase 3 studies for our flu vaccine (mRNA-1010), RSV vaccine in older adults (mRNA-1345) and CMV vaccine (mRNA-1647). Our COVID-19 vaccine (mRNA-1273) is described in detail above. Our ~~ten~~eight preclinical programs within our prophylactic vaccines modality are for a ~~combined COVID-19 and flu vaccine (mRNA-1073),~~ combined COVID-19, flu and RSV vaccine (mRNA-1230), combined pediatric RSV and hMPV vaccine (mRNA-1365), pan-HCoV vaccine (mRNA-1278), seasonal flu vaccines (mRNA-1011 and mRNA-1012), EBV vaccine to prevent long-term sequelae (mRNA-1195), VZV vaccine (mRNA-1468), and HSV vaccine (mRNA-1608) ~~and Nipah vaccine (mRNA-1215)~~. Three other vaccines as part of public health programs have had positive Phase 1 readouts – H10N8 vaccine (mRNA-1440), H7N9 flu vaccine (mRNA-1851), and Chikungunya vaccine (mRNA-1388) – but are not being further developed without government or other funding.

•Systemic secreted and cell surface therapeutics: We have ~~three~~two systemic secreted and cell surface therapeutics development candidates in our pipeline. Our secreted programs include Relaxin (mRNA-0184) for cardiac disorders and PD-L1 (mRNA-6981) for autoimmune hepatitis, and IL-2 (mRNA-6231) for autoimmune disorders. Our IL-2 program (mRNA-6231) is currently in a Phase 1 study, and is our first autoimmune therapeutic candidate to enter the clinic. The remaining programs for Relaxin (mRNA-0184) and PD-L1 (mRNA-6981)which are currently in preclinical development. We are stopping our IL-2 program (mRNA-6231) after early clinical data and in response to the evolving competitive landscape. We previously announced positive data from our Chikungunya Antibody program (mRNA-1944) within this modality; however, we do not expect to advance our Chikungunya Antibody program without outside funding, and we are not currently pursuing further development of it at this time.

•Cancer vaccines: We are currently developing three programs within our cancer vaccines modality. Our personalized cancer vaccine program ~~mRNA-4157~~(mRNA-4157) is being developed in collaboration with Merck and is in a multiple-arm Phase 1 trial and a randomized Phase 2 trial, which is fully enrolled. Our second program within this modality ~~mRNA-5671,~~ is a KRAS ~~vaccine.~~vaccine (mRNA-5671). We have retained all rights to our KRAS vaccine from Merck and we are evaluating next steps for the program. Our third program is our checkpoint vaccine (mRNA-4359), which ~~is in preclinical studies.~~has received safe to proceed from the FDA.

•Intratumoral immuno-oncology: We have two programs in this modality. Our first program, OX40L/IL-23/IL-36γ (Triplet) (mRNA-2752), is currently in a Phase 1 study that is designed as an open-label, multicenter study of intratumoral injections of Triplet (mRNA-2752) alone or in combination with durvalumab (anti-PD-L1). Our second program, IL-12 (MEDI1191), is being developed in collaboration with AstraZeneca. AstraZeneca is currently enrolling an open-label multicenter Phase 1 clinical trial of intratumoral injections of MEDI1191 alone and in combination with the checkpoint inhibitor, durvalumab.

•Localized regenerative therapeutics: Our localized VEGF-A program, AZD8601, which ~~is being~~was developed byin collaboration with AstraZeneca, has completed a Phase 1a/b trial to describe its safety, tolerability, protein production, and activity in diabetic patients. The study has met its primary objectives of describing safety and tolerability and secondary objectives of demonstrating protein production and changes in blood flow post AZD8601 administration. We believe these data provide clinical proof of mechanism for our mRNA technology outside of the vaccine setting. In 2021, the Phase 2 study met the primary endpoint of safety and tolerability of AZD8601 for the 3 mg dose. In the study of 11 patients, seven were treated with AZD8601 VEGF-A mRNA and four received placebo injections. Numerical trends were observed in endpoints in the heart failure efficacy domains compared with placebo, including increase in left ventricular ejection fraction (LVEF) and patient reported outcomes. In addition, all seven patients treated with AZD8601 had NT-proBNP (a biomarker that measures the level of a hormone that is elevated in patients with heart failure) levels below heart failure limit at 6 months follow-up compared to one of four patients treated with ~~placebo.~~placebo. After a portfolio review, AstraZeneca has ~~announced that they intend to move AZD8601 into further studies.~~ ~~Moderna~~ ~~has licensed worldwide commercial~~returned the rights to AZD8601 to ~~AstraZeneca~~.us. We are evaluating next steps for the program.

•Systemic intracellular therapeutics: We have five systemic intracellular therapeutics development candidates in our pipeline. Our intracellular programs address propionic acidemia, or PA (mRNA-3927), methylmalonic acidemia (MMA) (mRNA-3705), ~~phenylketonuria (PKU) (mRNA-3283),~~ glycogen storage disorder type 1a (GSD1a) (mRNA-3745), phenylketonuria (PKU) (mRNA-3283), and Crigler-Najjar Syndrome Type 1 (CN-1) (mRNA-3351). We have an ongoing Phase 1 clinical trials for PA (mRNA-3927), MMA (mRNA-3705) and ~~MMA (mRNA-3705)~~GSD1a (mRNA-3745). PKU (mRNA-3283)~~, GSD1a (mRNA-3745)~~ and CN-1 (mRNA-3351) are currently in preclinical development. ~~The FDA has granted Orphan Drug Designation for mRNA-3745 and has completed its review of the IND application allowing it to proceed to clinic.~~ We have entered into a collaboration agreement with the Institute for Life Changing Medicines (ILCM) to license mRNA-3351 to ILCM with no upfront fees, and without any downstream payments. ILCM will be responsible for the clinical development of mRNA-3351.

3234

Table of Contents

•Inhaled pulmonary therapeutics: We have one inhaled pulmonary therapeutic development candidate in our pipeline. Our program addresses cystic fibrosis, or CF (VXc-522), in collaboration partnership with Vertex Pharmaceuticals. VXc-522 is an mRNA therapeutic designed to treat the underlying cause of CF by enabling cells in the lungs to produce functional cystic fibrosis transmembrane conductance regulator (CFTR) protein for the treatment of the 10% of patients who do not produce any CFTR protein. IND-enabling studies are underway and Vertex expects to submit an IND for this program in 2022. Moderna has licensed worldwide commercial rights to VXc-522 to Vertex.

Financial Operations Overview

Revenue

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


		Three Months Ended March 31,					Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021				2022		2021		2022		2021
Revenue:	Revenue:							Revenue:
Product sales	Product sales		$	5,925	$	1,733		Product sales	$	4,531	$	4,197	$	10,456	$	5,930
Grant revenue	Grant revenue		126		194			Grant revenue	183		139		309		333
Collaboration revenue	Collaboration revenue		15		10			Collaboration revenue	35		18		50		28
Total revenue	Total revenue		$	6,066	$	1,937		Total revenue	$	4,749	$	4,354	$	10,815	$	6,291

For the three months ended ~~March 31,~~June 30, 2022, we recognized $4.5 billion of product sales from our COVID-19 vaccine, of which $1.5 billion was generated in the United States and $3.1 billion was generated from Europe and the rest of the world. For the three months ended June 30, 2021, we recognized $4.2 billion of product sales from our COVID-19 vaccine, of which $2.1 billion was generated in the United States and $2.1 billion was generated from Europe and the rest of the world.

For the six months ended June 30, 2022, we recognized $10.5 billion of product sales from our COVID-19 vaccine, of which $2.4 billion was generated in the United States and $8.1 billion was generated from Europe and the rest of the world. For the six months ended June 30, 2021, we recognized $5.9 billion of product sales from our COVID-19 vaccine, of which ~~$0.9~~$3.4 billion was generated in the United States and ~~$5.0~~$2.5 billion was generated from ~~the rest of the world. For the three months ended March 31, 2021, we recognized $1.7 billion of product sales from our COVID-19 vaccine, of which $1.4 billion was generated in the United States~~Europe and ~~$375 million was generated from~~ the rest of the world.

As of ~~March 31,~~June 30, 2022, we ~~had signed supply agreements of approximately $17.5 billion for the future supply of our COVID-19 vaccine through 2023, based on the confirmed volume, subject to modifications, and~~ had deferred revenue of ~~$5.9~~$4.3 billion associated with customer deposits received or billable under ~~these agreements. In addition, we believe that the SARS-CoV-2 virus will become endemic~~supply agreements for delivery of our COVID-19 vaccine into 2023. Based upon currently signed supply agreements for delivery of our COVID-19 vaccine in 2022, ~~and as a result,~~ we expect ~~greater seasonality in~~that our COVID-19 vaccine product sales ~~with sales slightly larger~~will be generally consistent in the second half of 2022, ~~than in~~as compared to the first half asof the ~~Northern Hemisphere enters~~year. We also anticipate that product sales will be greater in the ~~fall and winter in connection with~~fourth quarter of 2022 than the third quarter of 2022, driven by the expected timing of potential marketing authorizations of our COVID-19 bivalent booster ~~sales.~~candidates.

Other than product sales, our revenue has been primarily derived from government-sponsored and private organizations including BARDA, DARPA and the Gates Foundation and from strategic alliances with AstraZeneca, Merck and Vertex to discover, develop, and commercialize potential mRNA medicines.

Grant revenue was comprised as follows for the periods presented (in millions):


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Grant revenue:	Grant revenue:							Grant revenue:
BARDA (1)	BARDA (1)		$	122		$	192	BARDA (1)	$	179	$	134	$	301	$	326
Other	Other		4			2		Other	4		5		8		7
Total grant revenue	Total grant revenue		$	126		$	194	Total grant revenue	$	183	$	139	$	309	$	333

_______

(1) For the three months ended ~~March 31,~~June 30, 2022, ~~$120~~$175 million of BARDA grant revenue was related to our mRNA-1273 program and $2$4 million was related to our Zika vaccine program. For the ~~three~~six months ended ~~March 31, 2021, $190~~June 30, 2022, $295 million of BARDA grant revenue was related to our mRNA-1273 program and $2$6 million was related to our Zika vaccine program.

3335

Table of Contents

Collaboration revenue from our strategic alliances was comprised as follows for the periods presented (in millions):


		Three Months Ended March 31,			Three Months Ended June 30,						Six Months Ended June 30,
			2022			2021			2022		2021		2022		2021
Collaboration revenue:	Collaboration revenue:							Collaboration revenue:

AstraZeneca								AstraZeneca	$	4	$	4	$	4	$	4
Merck	Merck		10			—		Merck	5		4		15		4
Vertex	Vertex		4			9		Vertex	25		9		29		18
Other	Other		1			1		Other	1		1		2		2
Total collaboration revenue	Total collaboration revenue		$	15		$	10	Total collaboration revenue	$	35	$	18	$	50	$	28

We expect to continue to receive funding from our contract with BARDA. As of ~~March 31,~~June 30, 2022, the remaining available funding, net of revenue earned under our agreement with BARDA for the development of our mRNA-1273 vaccine was ~~$378~~$203 million. To the extent that existing or potential future products generate revenue, our revenue may vary due to many uncertainties in the future product demand, the development of our mRNA medicines and other factors.

Research and development expenses

We use our employee and infrastructure resources for the advancement of our platform, and for discovering and developing programs. Due to the number of ongoing programs and our ability to use resources across several projects, indirect or shared operating costs incurred for our research and development programs are generally not recorded or maintained on a program- or modality-specific basis. The following table reflects our research and development expenses, including direct program-specific expenses summarized by modality and indirect or shared operating costs summarized under other research and development expenses during the three and six months ended ~~March 31,~~June 30, 2022 and 2021 (in millions):


		Three Months Ended March 31,					Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021				2022		2021		2022		2021
Program expenses by modality:	Program expenses by modality:							Program expenses by modality:
Prophylactic vaccines	Prophylactic vaccines		$	190	$	248		Prophylactic vaccines	$	336	$	241	$	526	$	489
Systemic secreted and cell surface therapeutics	Systemic secreted and cell surface therapeutics		1		1			Systemic secreted and cell surface therapeutics	2		1		3		2
Cancer vaccines	Cancer vaccines		3		17			Cancer vaccines	2		7		5		24
Intratumoral immuno-oncology	Intratumoral immuno-oncology		6		6			Intratumoral immuno-oncology	6		7		12		13

Systemic intracellular therapeutics	Systemic intracellular therapeutics		4		5			Systemic intracellular therapeutics	9		6		13		11
Inhaled pulmonary therapeutics (1)	Inhaled pulmonary therapeutics (1)		2		—			Inhaled pulmonary therapeutics (1)	3		—		5		—
Total program-specific expenses by modality (2)	Total program-specific expenses by modality (2)		$	206	$	277		Total program-specific expenses by modality (2)	$	358	$	262	$	564	$	539
Other research and development expenses:	Other research and development expenses:							Other research and development expenses:
Discovery programs	Discovery programs		30		13			Discovery programs	41		15		71		28
Platform research	Platform research		34		25			Platform research	31		27		65		52
Technical development and unallocated manufacturing expenses	Technical development and unallocated manufacturing expenses		134		33			Technical development and unallocated manufacturing expenses	195		53		329		86
Shared discovery and development expenses	Shared discovery and development expenses		130		39			Shared discovery and development expenses	66		49		196		88
Stock-based compensation	Stock-based compensation		20		14			Stock-based compensation	19		15		39		29
Total research and development expenses	Total research and development expenses		$	554	$	401		Total research and development expenses	$	710	$	421	$	1,264	$	822

__________

(1)Inhaled pulmonary therapeutics modality was added in the fourth quarter of 2021.

(2)Includes a total of 43 and 30 development candidates at ~~March 31,~~June 30, 2022 and 2021, respectively. Program-specific expenses include external costs and allocated manufacturing costs of pre-launch inventory, mRNA supply and consumables, and are reflected as of the beginning of the period in which the program was internally advanced to development or removed if development was ceased.

Table of Contents

A “modality” refers to a group of programs with common product features and the associated combination of enabling mRNA technologies, delivery technologies, and manufacturing processes. The program-specific expenses by modality summarized in the table above include expenses we directly attribute to our programs, which consist primarily of external costs, such as fees paid to outside consultants, central laboratories, investigative sites, and contract research organizations (CROs) in connection with our preclinical studies and clinical trials, ~~CMOs,~~contract manufacturing organizations, and allocated manufacturing costs of pre-launch inventory, mRNA supply and consumables. Costs to acquire and manufacture pre-launch inventory, mRNA supply for preclinical studies and clinical trials are recognized and included in unallocated manufacturing expenses when incurred, and subsequently allocated to program-specific manufacturing costs after completion of the program-specific production. The timing of allocating manufacturing costs to the specific program varies depending on the program development and production schedule. We generally do not allocate personnel-related costs,

~~Table of Contents~~

including stock-based compensation, costs associated with our general platform research, technical development, and other shared costs on a program-specific basis. These costs were therefore excluded from the summary of program-specific expenses by modality.

Discovery program expenses are costs associated with research activities for our programs in the preclinical discovery stage, and primarily consist of external costs for CROs and lab services, and allocated manufacturing cost of preclinical mRNA supply and consumables.

Platform research expenses are mainly costs to develop technical advances in mRNA science, delivery science, and manufacturing process design. These costs include personnel-related costs, computer equipment, facilities, preclinical mRNA supply and consumables, and other administrative costs to support our platform research. Technology development and unallocated manufacturing expenses are primarily related to non-program-specific manufacturing process development and manufacturing costs.

Shared discovery and development expenses are research and development costs such as personnel-related costs and other costs, which are not otherwise included in development programs, discovery programs, platform research, technical development and unallocated manufacturing expenses, stock-based compensation, and other expenses.

The largest component of our total operating expenses has historically been our investment in research and development activities, including preclinical and clinical development of our product candidates, development of our platform, mRNA technologies, and manufacturing technologies.

As we continue to pursue our indication expansion of mRNA-1273, and continue to develop variant-specific COVID-19 vaccine candidates and our next-generation COVID-19 vaccine candidate, we expect to continue to incur significant additional expenses. In connection with the BARDA agreement to accelerate development of mRNA-1273, ~~significant~~ grant revenue and expenses within the committed funding scope are expected to continue in 2022. BARDA’s funding is expected to offset those expenses that are covered under the BARDA agreement, subject to our obtaining reimbursement from BARDA. As of ~~March 31,~~June 30, 2022, the remaining available funding, net of revenue earned was ~~$378~~$203 million.

Changes in expectations or outcomes of any of the known or unknown risks and uncertainties may materially impact our expected research and development expenditures. Continued research and development is central to the ongoing activities of our business. Investigational medicines in later stages of clinical development, such as our CMV vaccine, RSV vaccine, flu vaccine and our COVID-19 vaccine, generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development costs to continue to increase in the foreseeable future as our investigational medicines progress through the development phases and identify and develop additional programs. There are numerous factors associated with the successful commercialization of any of our investigational medicines, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time due to the early stage of development of our investigational medicines. Moreover, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.

Critical accounting policies and significant judgments and estimates

There have been no material changes in our critical accounting policies and estimates in the preparation of our condensed consolidated financial statements during the three months ended ~~March 31,~~June 30, 2022 compared to those disclosed in our 2021 Form 10-K.

Table of Contents

Results of operations

The following table summarizes our condensed consolidated statements of income for each period presented (in millions):


		Three Months Ended March 31,				Change 2022 vs. 2021				Three Months Ended June 30,				Change 2022 vs. 2021
		2022		2021		$		%		2022		2021		$		%
Revenue:	Revenue:								Revenue:
Product revenue	Product revenue	$	5,925	$	1,733	$	4,192	242%	Product revenue	$	4,531	$	4,197	$	334	8%
Grant revenue	Grant revenue	126		194		(68)		(35)%	Grant revenue	183		139		44		32%
Collaboration revenue	Collaboration revenue	15		10		5		50%	Collaboration revenue	35		18		17		94%
Total revenue	Total revenue	6,066		1,937		4,129		213%	Total revenue	4,749		4,354		395		9%
Operating Expenses:	Operating Expenses:								Operating Expenses:
Cost of sales	Cost of sales	1,017		193		824		427%	Cost of sales	1,381		750		631		84%
Research and development	Research and development	554		401		153		38%	Research and development	710		421		289		69%
Selling, general and administrative	Selling, general and administrative	268		77		191		248%	Selling, general and administrative	211		121		90		74%
Total operating expenses	Total operating expenses	1,839		671		1,168		174%	Total operating expenses	2,302		1,292		1,010		78%
Income from operations	Income from operations	4,227		1,266		2,961		234%	Income from operations	2,447		3,062		(615)		(20)%
Interest income	Interest income	15		4		11		275%	Interest income	40		3		37		1,233%
Other expense, net	Other expense, net	(13)		(10)		(3)		30%	Other expense, net	(13)		(2)		(11)		550%
Income before income taxes	Income before income taxes	4,229		1,260		2,969		236%	Income before income taxes	2,474		3,063		(589)		(19)%
Provision for income taxes	Provision for income taxes	572		39		533		1,367%	Provision for income taxes	277		283		(6)		(2)%
Net income	Net income	$	3,657	$	1,221	$	2,436	200%	Net income	$	2,197	$	2,780	$	(583)	(21)%


	Six Months Ended June 30,				Change 2022 vs. 2021
	2022		2021		$		%
Revenue:
Product revenue	$	10,456	$	5,930	$	4,526	76%
Grant revenue	309		333		(24)		(7)%
Collaboration revenue	50		28		22		79%
Total revenue	10,815		6,291		4,524		72%
Operating Expenses:
Cost of sales	2,398		943		1,455		154%
Research and development	1,264		822		442		54%
Selling, general and administrative	479		198		281		142%
Total operating expenses	4,141		1,963		2,178		111%
Income from operations	6,674		4,328		2,346		54%
Interest income	55		7		48		686%
Other expense, net	(26)		(12)		(14)		117%
Income before income taxes	6,703		4,323		2,380		55%
Provision for income taxes	849		322		527		164%
Net income	$	5,854	$	4,001	$	1,853	46%

Revenue

Total revenue increased by ~~$4.1 billion,~~$395 million, or ~~213%~~9%, for the three months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021, mainly due to an increase in product sales from sales of our COVID-19 vaccine. Product revenue increased by ~~$4.2 billion,~~$334 million, or ~~242%~~8%, for the three months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021, largely driven by a higher average selling price due to favorable customer mix. Grant revenue increased by $44 million, or 32%, for the three months ended June 30, 2022, compared to the same period in 2021, primarily driven by an increase in revenue from BARDA related to our mRNA-1273 vaccine development.

Total revenue increased by $4.5 billion, or 72%, for the six months ended June 30, 2022, compared to the same period in 2021, mainly due to an increase in product sales from sales of our COVID-19 vaccine. Product revenue increased by $4.5 billion, or 76%, for the six months ended June 30, 2022, compared to the same period in 2021, largely driven by our manufacturing capacity ramp-up. Grant revenue decreased by ~~$68~~$24 million, or ~~35%~~7%, for the ~~three~~six months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021, primarily driven by a decrease in revenue from BARDA related to our mRNA-1273 vaccine development.

Table of Contents

Operating expenses

Cost of sales

Cost of sales for the three months ended ~~March 31,~~June 30, 2022 was ~~$1.0~~$1.4 billion, including third-party royalties of ~~$207~~$157 million. Cost of sales for the three months ended ~~March 31,~~June 30, 2022 increased by ~~$824~~$631 million, or ~~427%~~84%, compared to the same period in ~~2021, primarily driven by higher product sales, and consequently higher third-party royalties and manufacturing costs.~~

2021. Cost of sales as a percentage of product sales for the three months ended ~~March 31,~~June 30, 2022 was ~~17%~~30%, compared to ~~11%~~18% for the same period in 2021. These increases were primarily attributable to write-downs for excess and obsolete inventory related to our COVID-19 vaccine, losses on firm purchase commitments of raw materials, and unutilized manufacturing capacity driven by a shift in product demand.

Cost of sales for the six months ended June 30, 2022 was $2.4 billion, including third-party royalties of $364 million. Cost of sales for the six months ended June 30, 2022 increased by $1.5 billion, or 154%, compared to the same period in 2021, primarily due to higher sales volume, as well as inventory write-downs and losses on firm purchase commitments of raw materials. Cost of sales as a percentage of product sales for the six months ended June 30, 2022 was 23%, compared to 16% for the same period in 2021. The increase was mainly ~~driven by~~due to write-downs for excess and obsolete inventory related to our COVID-19 vaccine and losses on firm purchase commitments of raw materials, and to a lesser extent, unutilized manufacturing capacity, and the lack of the pre-launch inventory benefit ~~(that~~that positively impacted the first quarter of ~~2021), coupled with inventory write-downs and a loss on firm purchase commitments. The increase was partially offset by a favorable customer mix and the scale up of our manufacturing processes.~~2021. If inventory sold for the ~~three~~six months ended ~~March 31,~~June 30, 2021 was valued at cost, our cost of sales for the period would have been ~~$377 million,~~$1.1 billion, or ~~22%~~19%, of our product sales.

We expect our manufacturing costs to increase as we move from a pandemic to a seasonal market environment for our COVID-19 vaccine. We expect that this shift will cause our cost of sales for the full year of 2022 to represent a higher percentage of our product ~~sales.~~sales than the percentage experienced in 2021.

~~Table of Contents~~

Research and development expenses

Research and development expenses increased by ~~$153~~$289 million, or ~~38%~~69%, for the three months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021. The increase was primarily attributable to ~~an increase in personnel-related costs of $39 million, an increase~~increases in clinical trial expenses of ~~$38~~$162 million, anpersonnel-related costs of $57 million, and consulting and outside services of $39 million.

Research and development expenses increased by $442 million, or 54%, for the six months ended June 30, 2022, compared to the same period in 2021. The increase was primarily attributable to increases in clinical trial expenses of $200 million, personnel-related costs of $96 million, consulting and outside services of $62 million, technology and facility-related costs of ~~$24~~$32 million, and ~~an increase in consulting and outside services~~manufacturing costs for clinical trial materials of ~~$23~~$27 million. These increases for the ~~three-month period~~three and six month periods in 2022 were largely driven by increased ~~mRNA-1273~~ clinical development, particularly our COVID-19 vaccine and RSV programs, and headcount.

We expect that research and development expenses will increase in 2022 as we continue to progress our indication expansion of mRNA-1273, and continue to develop our pipeline and advance our product candidates into later-stage development, in particular our RSV, flu and ~~flu~~CMV vaccine programs. In addition, we also expect to incur significant costs related to the development of variant-specific COVID-19 candidates and our next-generation COVID-19 vaccine candidate.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by ~~$191~~$90 million, or ~~248%~~74%, for the three months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021. The increase was mainly due to an increase in distributor fees and marketing expenses of $31 million and an increase in personnel-related costs of $27 million. These increases for the three month period in 2022 were primarily driven by our COVID-19 vaccine commercialization-related activities and increased headcount.

Selling, general and administrative expenses increased by $281 million, or 142%, for the six months ended June 30, 2022, compared to the same period in 2021. The increase was mainly due to an increase in distributor fees of $66 million, an increase in personnel-related costs of $58 million, an endowment to the Moderna Charitable Foundation (the Foundation) of $50 million, an increase in ~~distributor fees of $47 million, an increase in personnel-related costs of $31 million, an increase in~~ consulting and outside services of ~~$29~~$37 million, and an increase in marketing expenses of ~~$15~~$27 million. These increases for the ~~three-month~~six month period in 2022 were primarily driven by our COVID-19 vaccine commercialization-related activities, increased headcount, and the launch of the Foundation.

We expect that selling, general and administrative expenses will increase in 2022, as we continue to build out our global commercial, regulatory, sales and marketing infrastructure to support the commercialization of our COVID-19 vaccine, and continue to expand the number of programs and our business operations.

Table of Contents

Interest income

Interest income increased by ~~$11~~$37 million ~~or 275%,~~ for the three months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021. Interest income increased by $48 million for the six months ended June 30, 2022, compared to the same period in 2021. The ~~increase~~increases in interest income from our investments in marketable securities for the ~~three-month period~~three and six month periods in 2022 were mainly driven by increased investment balances and an overall higher interest rate environment.

Other expense, net

The following table summarizes other expense, net for each period presented (in millions):


		Three Months Ended March 31,				Change 2022 vs. 2021				Three Months Ended June 30,				Change 2022 vs. 2021
		2022		2021		$		%		2022		2021		$		%
Loss on investments		$	(6)	$	—	$	(6)	100%
(Loss) gain on investments									(Loss) gain on investments	$	(8)	$	2	$	(10)	(500)%
Interest expense	Interest expense	(6)		(3)		(3)		100%	Interest expense	(5)		(5)		—		—%
Other expense, net		(1)		(7)		6		(86)%
Other income, net									Other income, net	—		1		(1)		(100)%
Total other expense, net	Total other expense, net	$	(13)	$	(10)	$	(3)	30%	Total other expense, net	$	(13)	$	(2)	$	(11)	550%


	Six Months Ended June 30,				Change 2022 vs. 2021
	2022		2021		$		%
(Loss) gain on investments	$	(14)	$	2	$	(16)	(800)%
Interest expense	(11)		(8)		(3)		38%
Other expense, net	(1)		(6)		5		(83)%
Total other expense, net	$	(26)	$	(12)	$	(14)	117%

Total other expense, net increased by $3$11 million ~~or 30%,~~ for the three months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021. Total other expense, net increased by $14 million for the six months ended June 30, 2022, compared to the same period in 2021. The ~~increase~~increases in other expense, net for the ~~three-month period~~three and six month periods in 2022 ~~was~~were primarily due to realized losses on available-for-sale debt ~~securities, partially offset by a net gain related to our balance sheet hedging activities, and foreign currency transactions and remeasurements.~~securities. Our interest expense is primarily related to our finance leases. Please refer to Note 11 to our condensed consolidated financial statements.

Income taxes

Provision for income taxes ~~increased~~decreased by ~~$533~~$6 million for the three months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021, primarily due to a decrease in pre-tax income, partially offset by a higher effective tax rate. Provision for income taxes increased by $527 million for the six months ended June 30, 2022, compared to the same period in 2021, primarily due to an increase in pre-tax income and a higher effective tax rate. The increase in effective tax rate infor the three and six months ended June 30, 2022 ~~as 2021 included~~was mainly due to the tax benefit recorded in 2021 related to the release of the valuation allowance on the majority of our deferred tax ~~assets.~~assets, as well as a decrease in excess windfall benefits from stock-based compensation, partially offset by an increase in foreign derived intangible income benefit in 2022. We expect that our effective tax rate will increase for the full year 2022 compared to 2021, mainly driven by the release of the valuation allowance on the majority of the deferred tax assets in 2021.

3740

Table of Contents

Liquidity and capital resources

The following table summarizes our cash, cash equivalents, investments and working capital for each period presented (in millions):


		March 31,		December 31,			June 30,		December 31,
		2022		2021			2022		2021
Financial assets:	Financial assets:					Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	5,048	$	6,848	Cash and cash equivalents	$	2,873	$	6,848
Investments	Investments	5,067		3,879		Investments	5,024		3,879
Investments, non-current	Investments, non-current	9,171		6,843		Investments, non-current	10,162		6,843
Total	Total	$	19,286	$	17,570	Total	$	18,059	$	17,570

Working capital:	Working capital:					Working capital:
Current assets	Current assets	$	16,350	$	16,071	Current assets	$	13,563	$	16,071
Current liabilities	Current liabilities	9,238		9,128		Current liabilities	6,812		9,128
Total	Total	$	7,112	$	6,943	Total	$	6,751	$	6,943

Our cash, cash equivalents and investments are invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Investments, consisting primarily of government and corporate debt securities, are stated at fair value. Cash, cash equivalents and investments as of ~~March 31,~~June 30, 2022 increased by ~~$1.7 billion,~~$489 million, or ~~10%~~3%, compared to December 31, 2021. During the ~~three~~six months ended ~~March 31,~~June 30, 2022, we generated cash from operations of ~~$2.8~~$3.1 billion, partially offset by repurchases of our common stock of ~~$623 million,~~$1.9 billion, purchases of property and equipment of ~~$132~~$219 million, and unrealized losses on available-for-sale debt securities of ~~$220~~$326 million.

Working capital, which is current assets less current liabilities, as of ~~March 31,~~June 30, 2022 ~~increased~~decreased by ~~$169~~$192 million, or 2%3%, compared to December 31, 2021, primarily due to a decrease in deferred revenue of ~~$654 million and an increase in inventory of $501 million,~~$2.2 billion, mainly driven by revenue recognized from deferred revenue in excess of customer deposits received, and ~~our increased inventory levels. The increase~~a decrease in income taxes payable of $527 million. This was ~~partially~~ offset by a decrease in cash, cash equivalents and short-term investments of ~~$612 million,~~$2.8 billion, primarily due to purchases of long-term marketable ~~securities.~~securities, repurchases of our common stock, and income tax payments.

As of ~~March 31,~~June 30, 2022, we did not have any off-balance sheet arrangements.

Cash flow

The following table summarizes the primary sources and uses of cash for each period presented (in millions):


		Three Months Ended March 31,					Six Months Ended June 30,
		2022		2021			2022		2021
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Operating activities	Operating activities	$	2,763	$	2,971	Operating activities	$	3,067	$	7,034
Investing activities	Investing activities	(3,921)		(180)		Investing activities	(5,073)		(4,058)
Financing activities	Financing activities	(642)		26		Financing activities	(1,969)		2
Net (decrease) increase in cash, cash equivalents and restricted cash	Net (decrease) increase in cash, cash equivalents and restricted cash	$	(1,800)	$	2,817	Net (decrease) increase in cash, cash equivalents and restricted cash	$	(3,975)	$	2,978

Operating activities

We derive cash flows from operations primarily from cash collected from customer deposits and accounts receivable related to our COVID-19 vaccine supply agreements, as well as certain government-sponsored and private organizations and strategic alliances. Our cash flows from operating activities are significantly affected by our use of cash for operating expenses and working capital to support the business.

~~Table of Contents~~

InBeginning in the third quarter of 2020, we entered into supply agreements with the U.S. Government, other international governments, and Gavi for the supply of our COVID-19 vaccine and received upfront deposits. As of ~~March 31,~~June 30, 2022, we had ~~$5.9~~$4.3 billion in deferred revenue related to customer deposits received or billable. In addition, we expect to continue to receive funding from our contract with BARDA related to our mRNA-1273 program. As of ~~March 31,~~June 30, 2022, the remaining available funding from BARDA, net of revenue earned was ~~$378~~$203 million.

Table of Contents

Net cash provided by operating activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 was ~~$2.8~~$3.1 billion and consisted of net income of ~~$3.7~~$5.9 billion and non-cash adjustments of $5$83 million, partially offset by a net change in assets and liabilities of ~~$0.9~~$2.7 billion. Non-cash items primarily included deferred income taxes of ~~$146~~$376 million, depreciation and amortization of ~~$79~~$155 million, and stock-based compensation of ~~$44 million, and amortization of investment premium and discount of $18~~$94 million. The net change in assets and liabilities was mainly due to a decrease in deferred revenue of ~~$805~~$2.4 billion, a decrease in income taxes payable of $527 million, an increase in inventory of ~~$501~~$480 million, and an increase in prepaid expenses and other assets of ~~$414~~$324 million, partially offset by a decrease in accounts receivable of $484 million, an increase in ~~income taxes payable~~accrued liabilities of ~~$716~~$305 million, and an increase in other liabilities of $263 million.

Net cash provided by operating activities decreased by ~~$208 million,~~$4.0 billion, or 7%56%, during the ~~three~~six months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021, primarily attributable to revenue recognized from deferred revenue in excess of customer deposits received and increased income tax payments, partially offset by increased product sales and higher collection of receivables.

Investing activities

Our primary investing activities consist of purchases, sales, and maturities of our investments and capital expenditures for leasehold improvements, manufacturing, laboratory, computer equipment and software.

Net cash used in investing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 was ~~$3.9~~$5.1 billion, which primarily included purchases of marketable securities of ~~$5.6~~$8.7 billion and purchases of property and equipment of ~~$132~~$219 million, partially offset by proceeds from sales of marketable securities of ~~$1.4~~$2.5 billion and proceeds from maturities of marketable securities of ~~$441 million.~~$1.4 billion.

Net cash used in investing activities increased by ~~$3.7~~$1.0 billion, or 25%, during the ~~three~~six months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021, primarily reflecting timing differences related to purchases, sales, and maturities of marketable debt securities and changes in our ~~portfolio-mix.~~investment portfolio mix.

Financing activities

Net cash used byin financing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 was ~~$642 million,~~$2.0 billion, primarily ~~from repurchases~~due to repurchase of common stock of ~~$623 million.~~$1.9 billion.

Net cash used in financing activities increased by ~~$668 million~~$2.0 billion during the ~~three~~six months ended ~~March 31,~~June 30, 2022, compared to the same period in 2021, mainly due to ~~repurchases~~repurchase of common stock.

Operation and funding requirements

Our principal sources of funding as of ~~March 31,~~June 30, 2022 consisted of cash and cash equivalents, investments, and cash we expect to generate from operations. We generated net income of $12.2 billion for the year ended 2021, following the authorization of our first commercial product in December 2020. From our inception to the end of 2020, we incurred significant losses from operations due to our significant research and development expenses. We have retained earnings of ~~$13.6~~$15.8 billion as of ~~March 31,~~June 30, 2022.

We have significant future capital requirements including expected operating expenses to conduct research and development activities, operate our organization, meet capital expenditure needs, and fund our share repurchase program (refer to Note 13 to our condensed consolidated financial statements). We expect our expenses to increase in connection with our ongoing activities, particularly as we continue research and development of our development candidates and clinical activities for our investigational medicines. We also expect our expenses to increase associated with manufacturing costs, including our arrangements with our international supply and manufacturing partners. Our ongoing work on ~~mRNA-1273,~~our COVID-19 vaccine, including development of any new generations of boosters and vaccines against variants of SARS-CoV-2, and buildout of global commercial, regulatory, sales and marketing infrastructure to support the commercialization of our COVID-19 vaccine will require significant cash outflows during 2022, most of which may not be reimbursed or otherwise paid for by our partners or collaborators. In addition, we have substantial facility, lease and purchase obligations (refer to Note 11 and Note 12 to our condensed consolidated financial statements). We have entered into certain collaboration and licensing agreements with third parties that include the funding of certain research and development activities and potential future milestone and royalty payments by us.

Table of Contents

We believe that our cash, cash equivalents, and investments as of ~~March 31,~~June 30, 2022, together with cash expected to be generated from operations, will be sufficient to enable us to fund our projected operations, capital expenditures and stock repurchases through at least

~~Table of Contents~~

the next 12 months from the issuance of these financial statements included in this Form 10-Q. We are subject to all the risks related to the development and commercialization of novel medicines, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors, ~~including expenses related to the ongoing COVID-19 pandemic,~~ which may adversely affect our business. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

If we fail to sustain profitability on a continuing basis, we may be required to finance future cash needs through a combination of public or private equity offerings, structured financings and debt financings, government funding arrangements, potential future strategic alliances from which we receive upfront fees, milestone payments, and other forms of consideration, and marketing, manufacturing, distribution and licensing arrangements. If we are required to finance future cash needs, additional capital may not be available on reasonable terms, if at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back, or discontinue the development or commercialization of one or more of our investigational medicines, or slow down or cease work on one or more of our programs. If we raise additional funds through the issuance of additional equity or debt securities, it could result in dilution to our existing stockholders or increased fixed payment obligations, and any such securities may have rights senior to those of our common stock. If we incur indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise funds through strategic alliances or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or investigational medicines or grant licenses on terms that may not be favorable to us. Any of these events could significantly harm our business, financial condition, and prospects.

Contractual Obligations

As of ~~March 31,~~June 30, 2022, other than disclosed within Note 11 and Note 12 to our condensed consolidated financial statements, there have been no material changes to our contractual obligations and commitments from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2021 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our market risks, and the way we manage them, are summarized in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our 2021 Form 10-K. There have been no material changes to our market risk or to our management of such risks for the three and six months ended ~~March 31,~~June 30, 2022.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~March 31,~~June 30, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the ~~Securities~~ Exchange Act ~~of 1934 (the Exchange Act)~~ means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of ~~March 31,~~June 30, 2022, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended ~~March 31,~~June 30, 2022, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

4043

Table of Contents

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by the collusion of two or more people or by a management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II

Item 1. Legal Proceedings

We are involved in various claims and legal proceedings of a nature considered ordinary course in our business, including the intellectual property litigation described below. Most of the issues raised by these claims are highly complex and subject to substantial uncertainties. For a description of risks relating to these and other legal proceedings we face, see Part I, Item 1A, “Risk Factors,” of our 2021 Form 10-K, ~~filed in February 2022,~~ including the discussion under the headings entitled “Risks related to our intellectual property,” and “Risks related to the manufacturing of our commercial products, development candidates, investigational medicines and our future pipeline.”

The outcome of any such proceedings, regardless of the merits, is inherently uncertain; therefore, assessing the likelihood of loss and any estimated damages is difficult and subject to considerable judgment. We describe below those legal matters for which a material loss is either (i) possible but not probable, and/or (ii) not reasonably estimable at this time.

Proceedings Related to Patents Owned by Arbutus

On February 28, 2022, Arbutus Biopharma Corporation (Arbutus) and Genevant Sciences GmbH (Genevant) filed a complaint against Moderna in the U.S. District Court for the District of Delaware asserting that Moderna’s manufacture, use, offer to sell, or sales within the United States (as well as importation into the United States) of its COVID-19 vaccine, or active inducement of the same, willfully infringes U.S. Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,364,435, 9,504,651, and 11,141,378, which concern lipid nanoparticles. The action is Arbutus Biopharma Corp. et al. v. Moderna Inc. et al., Case No. 1:22-cv-00252-MN (D. Del.). Arbutus and Genevant are not seeking to prevent or stop the marketing or sales of Moderna's COVID-19 vaccine. The complaint seeks a judgment of infringement of the asserted patents, monetary damages (together with interest), costs and expenses of the lawsuit, and attorneys’ fees.

Proceedings Related to Patents Owned by Alnylam

On March 17, 2022 and July 12, 2022, Alnylam Pharmaceuticals, Inc. (Alnylam) filed ~~a complaint~~complaints against Moderna in the U.S. District Court for the District of Delaware asserting that Moderna’s manufacture, use, offer to sell, or sales within the United States (as well as import into the United States) of its COVID-19 vaccine, or active inducement of the same, infringes U.S. Patent No. 11,246,933, which issued on February 15, 2022, and concerns cationic ~~lipids.~~lipids, and U.S. Patent No. 11,382,979, which issued on July 12, 2022 and concerns lipid nanoparticles. The ~~action is~~actions are Alnylam Pharmaceuticals, Inc. v. Moderna, Inc. et al., Case No. 1:22-cv-00335-CFC (D. Del.) and Alnylam Pharmaceuticals, Inc. v. Moderna, Inc. et al., Case No. 1:22-cv-00925-CFC (D. Del.). Alnylam is not seeking to prevent or stop the marketing or sales of Moderna's COVID-19 vaccine. The ~~complaint seeks~~complaints seek a judgment of infringement of the asserted ~~patent,~~patents, monetary damages (together with interest), costs and expenses of the ~~lawsuit,~~lawsuits, and attorneys’ fees.

Item 1A. Risk Factors

Information regarding risk and uncertainties related to our business appears in Part I, Item 1A. “Risk Factors” of our 2021 Form 10-K. There have been no material changes from the risk factors previously disclosed in the 2021 Form 10-K other than those set forth ~~below.~~in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and filed with the SEC on May 4, 2022.

~~Table of Contents~~

We may encounter difficulties producing, shipping or successfully commercializing our COVID-19 vaccine consistent with our existing or potential contractual obligations, including due to changes in market dynamics or delays or difficulties experienced by our commercial partners.

In response to the global COVID-19 pandemic, we are continuing to pursue the rapid manufacture, distribution and clinical testing of our COVID-19 vaccine (mRNA-1273), which is our only commercial product and source of product revenues. We may encounter difficulties producing the vaccine on the timelines and in the quantities set forth in our existing or future supply agreements. We may also be unsuccessful in entering into contracts for future sales of COVID-19 vaccines. Our ability to commercialize an effective vaccine depends on our manufacturing capability, both at our own manufacturing facility and those of our manufacturing partners, which we rapidly scaled in response to the pandemic. We are committing substantial financial resources and personnel to the development, manufacture and distribution of our COVID-19 vaccine, including to support the scale-up of manufacturing to enable our pandemic response, which may cause delays in or otherwise negatively impact our other development programs. We may need to, or the U.S. government may require us to, divert resources and capital from our other programs to the production of COVID-19 vaccines.

We do not have sufficient internal manufacturing infrastructure to support the global roll-out of our COVID-19 vaccine on our own. We have entered into strategic collaborations for the production, as well as for commercial fill-finish manufacturing, of our COVID-19 vaccine to supply markets both in and outside the United States. We may need to engage additional collaborators in the future, including contract manufacturing organizations (CMOs), government and non-government organizations, and other manufacturing partners, to assist in meeting our capacity needs. If we cannot enter into such arrangements on favorable terms, or at all, our ability to develop, manufacture and distribute our COVID-19 vaccine would be adversely affected.

Prior to 2020, we had not ramped up our organization for a commercial launch of any product, and doing so during a pandemic with an urgent, critical global need poses additional challenges, such as setting up distribution channels, building global teams with specialized skills, and managing potential intellectual property disputes or challenges. We may also face challenges sourcing a sufficient amount of raw materials to support the demand for our COVID-19 vaccine. We may be unable to effectively create a supply chain for the vaccine to adequately support demand as we rely on our third-party collaborators being able to fulfill demand. For example, we have in the past and may in the future experience international shipping delays as our supply chain expands and grows more complex. Any capacity or production issues or delays experienced by our collaborators may cause us to fail to meet certain product volume or delivery timing obligations under our COVID-19 supply agreements. Furthermore, we expect to continue to make significant investments in our manufacturing capacity and commercial network as we continue to expand our commercial launch efforts.

~~Additionally, evolving dynamics in the market for COVID-19 vaccines are likely to impact our results.~~For example, we anticipate that our product mix will shift from a two-dose 100 µg primary series to 50 µg booster doses as COVID-19 evolves to an endemic phase, with greater seasonality of sales linked to the fall and winter season in the Northern and Southern Hemispheres.As a result of this change in product mix, we will likely require lower levels of raw materials and production capacity as the market shifts to seasonal booster doses. This change in product mix and evolving market dynamics will require us to purchase fewer raw materials and scale back our manufacturing operations with contract manufacturers, which have in the past and may in the future result in increased costs associated with exiting commitments with suppliers, as well as charges to write off unused inventory.~~If we are unable to effectively manage evolving demand dynamics, our business, financial condition, results of operations, and prospects may be negatively impacted.~~

4244

Table of Contents

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information with respect to the shares of common stock repurchased by us during the three months ended ~~March 31,~~June 30, 2022:

Period Total Number of Shares Purchased
Average Price Paid per Share (1)
Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
(in millions)
January 1 - January 31, 2022 (2)
604,018 $ 236.33 4,092,160 $ —
February 1 - February 28, 2022 — $ — — $ —
March 1 - March 31, 2022 (3)
3,211,425 $ 149.46 3,211,425 $ 2,520
Total 3,815,443


Period	Total Number of Shares Purchased	Average Price Paid per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions)



April 1 - April 30, 2022	2,491,413	$	155.34	5,702,838	$	2,133
May 1 - May 31, 2022	3,459,344	$	137.64	9,162,182	$	1,657
June 1 - June 30, 2022	3,221,557	$	135.03	12,383,739	$	1,222
Total	9,172,314

_______

(1) Average price paid per share includes related expenses.

~~(2)~~ ~~Relates to our 2021 Repurchase Program~~

~~(3)~~ ~~Relates to our 2022 Repurchase Program~~

Refer to Note 1 313 to condensed consolidated financial statements for information regarding our share repurchase programs.

Item 6. Exhibits

The Exhibits listed below are filed or incorporated by reference as part of this Form 10-Q.


Exhibit No.						Exhibit Index

10.1*#						~~Offer Letter~~Amended and Restated Non-Employee Director Compensation Policy, effective April 28, 2022.
10.2#						Updated Executive Retirement and Strategic Consulting Agreement, dated May 27, 2022, between ModernaTX, Inc. and David Meline (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed on June 1, 2022).
10.3#						Executive Separation Agreement and Release, dated May 13, 2022, between Moderna TX, Inc. and Jorge Gomez (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed on May 13, 2022).
10.4*†						Amendment No. 13 to Agreement No. HHSO100201600029C, by and between ModernaTX, Inc. and ~~Jorge Gomez,~~the Biomedical Advanced Research and Development Authority, dated as of ~~April 6,~~March 23, 2022.
~~10.2*#~~						~~Executive Retirement and Strategic Consulting Agreement by and between ModernaTX, Inc. and David Meline, dated as of April~~ 10 ~~, 2022.~~
~~10.3†~~10.5†						Amendment Nos. ~~P00018, P00019, P00020~~P00022 and ~~P00021~~P00023 to Award Contract No. W911QY20C0100, by and between Moderna US Inc. and the Army Contracting Command of the U.S. Department of Defense, dated August 9, 2020 (incorporated by reference to Exhibit ~~10.40~~10.5 to the Company’s ~~Annual~~Quarterly Report on ~~10-K~~Form 10-Q for the ~~fiscal year~~quarterly period ended ~~December~~March 31, ~~2021, filed on February 25,~~ 2022).
10.410.6†						Amendment No. ~~12 to Agreement No. HHSO100201600029C, by and between ModernaTX, Inc. and the Biomedical Advanced Research and Development Authority, dated as of March 23, 2022.~~
~~10.5*†~~						~~Amendment Nos. P00022 and P00023~~P00024 to Award Contract No. W911QY20C0100, by and between Moderna US Inc. and the Army Contracting Command of the U.S. Department of Defense, dated August 9, 2020.



31.1*						Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*						Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+						Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*						XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*						XBRL Taxonomy Extension Schema Document
101.CAL*						XBRL Taxonomy Extension Calculation Document
101.DEF*						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*						XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						XBRL Taxonomy Extension Presentation Link Document
104*						Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.)

Table of Contents

~~Table of Contents~~


*			Filed herewith


†			Portions of this exhibit (indicated by asterisks) have been omitted in accordance with the rules of the Securities and Exchange Commission.
#			Indicates a management contract or any compensatory plan, contract or arrangement.
+			The certification furnished in Exhibit 32.1 hereto is deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certification will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference.

4446

Table of Contents

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		MODERNA, INC.

Date:	By:	/s/ Stéphane Bancel
~~May 4,~~August 3, 2022
		Stéphane Bancel
		Chief Executive Officer and Director
		(Principal Executive Officer)

Date:	By:	/s/ David W. Meline
~~May 4,~~August 3, 2022
		David W. Meline
		Chief Financial Officer
		(Principal Financial Officer)

4547