Teaching Cats To Do Your Taxes

The FDA just delivered Moderna (MRNA) a Refusal-to-File letter for its influenza vaccine mRNA-1010, which is regulatory speak for “we’re not even going to look at this.”

It’s the bureaucratic equivalent of returning an unopened package to the sender, and it triggered a 10% after-hours selloff that erased whatever goodwill the stock had built from its recent rally to $50.

I’ve been bearish on Moderna since December, and this RTF doesn’t change my view; it crystallizes it.

The company’s got a declining COVID franchise, an RSV shot that can’t compete with GSK (GSK) and Pfizer (PFE), a regulatory headache, and a cash burn running at $2 billion annually.

The only thing keeping Moderna interesting is its cancer vaccine collaboration with Merck (MRK), where 5-year melanoma data showed 49% reduction in recurrence or death versus Keytruda alone.

It’s legitimately promising, but personalized cancer vaccines require sequencing and custom mRNA manufacturing, taking 2-3 months per patient. It’s bespoke medicine in an industry that makes money on mass production.

The FDA denied accelerated approval, and melanoma is the easiest indication because of its high tumor mutational burden. Extrapolating success to “cold” tumors is like assuming that because you can teach a golden retriever to fetch, you can teach a cat to do your taxes.

The RTF centers on comparator choice, which sounds technical until you realize it’s an argument about which vaccine Moderna should have competed against.

The company ran a 40,000-patient trial comparing mRNA-1010 against standard-dose vaccine in adults over 50, showing 26.6% relative efficacy. The FDA says standard-dose doesn’t reflect “best-available standard of care” for seniors, which, per CDC guidelines, is a high-dose vaccine.

Moderna claims the FDA said standard-dose was “acceptable” in 2024. The FDA apparently changed its mind, or Moderna wasn’t listening, or both.

Welcome to biotech, where the rules change faster than a toddler’s mood.

The company tested against high doses in a smaller trial measuring antibody levels, not clinical outcomes.

Big study against the wrong comparator, small study against the right comparator, measuring the wrong endpoint. It’s like showing up to a physics exam with your chemistry homework.

Best case, the FDA reviews after a Type A meeting with some delay. Likely scenario, Moderna runs another outcomes trial against high-dose, pushing approval back two flu seasons.

Missing an entire season matters because first-mover advantage evaporates like credibility at a penny stock investor conference.

The broader issue is regulatory risk across Moderna’s pipeline, which resembles regulatory whack-a-mole where Moderna is always one step behind the hammer. The combination flu-COVID vaccine mRNA-1083 was withdrawn from review in May, waiting for P304 data.

That data’s now rejected as a wrong comparator. It’s a domino effect, except the dominoes are billion-dollar development programs.

Current revenue comes almost entirely from the COVID vaccine at roughly $1.2 billion and the RSV vaccine at $4 million for nine months ending September 2025, down 48% year-over-year.

COVID vaccination rates keep declining as people take their chances with the virus rather than another booster.

mRESVIA managed just $2 million in Q3 2025 sales. You read that right – $2 million, which in biotech is what you spend on coffee for a Phase III trial planning meeting.

Cash burn of $1.978 billion over trailing 12 months is improved from $3 billion in 2023-2024, which management touts as disciplined cost control. It’s still substantial for a company with declining revenue, like celebrating you’re only losing half as much money while income drops by half.

Management raised year-end cash to $8.1 billion and expects FY25 revenue of $1.9 billion.

Neither changes the fundamental challenge of replacing commoditized COVID revenue with products that can’t navigate FDA approval without stepping on landmines.

At $42 and roughly $15 billion market cap, Moderna’s priced for eventual oncology success while carrying minimal risk premium for regulatory obstacles, cash burn, and execution challenges.

This is akin to pricing a restaurant based on the assumption that one day it might get a Michelin star, while ignoring that it currently can’t get the health inspector to approve the kitchen.

The mRNA platform remains scientifically interesting – I’ll give them that – but interesting science doesn’t pay bills any more than interesting ideas pay rent.

The stock remains a sell until there’s clarity on the path to profitability. The RTF is just the latest example of regulatory friction delaying timelines, increasing costs, and creating uncertainty around what was supposed to be a straightforward approval.

At least with personalized cancer vaccines, the FDA can’t return them unopened – they’re already customized for individual patients.

So Moderna’s finally stopped trying to teach cats to do taxes and found a product that can’t be rejected before review. Whether it can be approved after review is another matter.