Moderna Slashes 2025 Revenue Guidance Amid Falling Covid Vaccine Demand

LOCAL MARKET COMMENTARY

The JSE Top 40 index saw a 1.74% decline, closing at 73,566.5 points, while the All Share index finished 1.7% lower at 82,045.8 points. In a noteworthy development, the Competition Commission recommended that African Rainbow Capital, led by billionaire Patrice Motsepe, divest from one of South Africa’s largest fresh agricultural produce agencies due to concerns over competition. African Rainbow holds substantial stakes in the RSA Group and Subtropico, which collectively control a significant portion of South Africa's markets for staple fruit and vegetables.

EUROPEAN MARKET COMMENTARY

European equities fell to a one-week low on Monday, driven by a broader market pullback as global stocks came under pressure following U.S. job data. The pan-European STOXX 600 index ended the day down 0.5% at 508.71 points, marking its lowest close since January 6. This followed a nearly 1% drop on Friday. Meanwhile, Italy's residents’ deposits with domestic banks grew for the sixth consecutive month, rising 4.4% year-on-year in November. However, bank lending to businesses continued its decline for the 22nd consecutive month, according to the Bank of Italy.

US MARKET COMMENTARY

The Dow Jones Industrial Average rose on Monday, outperforming the broader market, while the Nasdaq Composite slipped as major tech stocks, including Palantir and Nvidia, saw continued sell-offs. Palantir dropped over 3%, and Nvidia fell nearly 2%, adding to their losses from the previous week. Investors are now turning their attention to the fourth-quarter earnings season, with major banks like Citigroup, Goldman Sachs, and JPMorgan Chase reporting on Wednesday, followed by Morgan Stanley and Bank of America on Thursday. This week also brings key economic data, including the December consumer price index and producer price index reports.

ASIA MARKET COMMENTARY

Asia-Pacific markets saw mixed performance this morning following a volatile session on Wall Street. In India, annual inflation declined for the second consecutive month in December, coming in at 5.22%, slightly below expectations. This reduction strengthens the case for potential interest rate cuts by the Reserve Bank of India. Meanwhile, the Bank of Japan is contemplating interest rate hikes next week, as expectations for sustained wage gains increase. Deputy Governor Ryozo Himino noted that it would be unusual for real interest rates to remain negative once Japan overcomes deflationary pressures.

CURRENCY MARKET COMMENTARY

The South African rand hovered near a nine-month low against the U.S. dollar on Monday, pressured by an uncertain outlook for U.S. interest rates. The dollar remained strong at its highest point in over two years as traders reassessed the likelihood of U.S. rate cuts in 2025 following strong economic data. Meanwhile, the British pound continued its recent decline against both the dollar and the euro, with concerns about Britain’s fiscal health pushing gilt yields higher for the sixth consecutive day. With President-elect Donald Trump's upcoming inauguration, analysts are focusing on his policies, which are expected to stimulate growth but also heighten inflationary pressures.

COMMODITY MARKET COMMENTARY

Gold prices declined on Monday as the U.S. dollar surged to a two-year high, buoyed by a strong jobs report that solidified expectations the Federal Reserve will adopt a cautious stance on interest rate cuts this year. Oil prices opened lower this morning but remain near four-month highs, driven by increased demand from China and India, as they seek new suppliers following the U.S. sanctions on Russian oil. The sanctions, imposed on Gazprom Neft, Surgutneftegas, and 183 vessels associated with Russia's “shadow fleet,” are expected to result in significant financial losses for Russia.

Northam Platinum Holdings Limited (NPH) -2.67%

Northam Platinum reported solid operational results for the six-month period ending 31 December 2024 (H1 F2025), with a 3.7% increase in total equivalent refined platinum group metal (PGM) production from its own operations, alongside a 7.5% growth in chrome concentrate output compared to H1 F2024. The company is progressing towards its strategic target of producing one million 4E ounces annually, with an emphasis on mechanized mining from high-quality UG2 orebodies. This strategy strengthens operational efficiency, diversifies across key areas, and supports long-term sustainability while keeping Northam at the lower end of the sector’s cost curve. At Zondereinde, PGM production is on track despite a temporary stoppage in November due to an Eskom substation failure. Improvements in UG2 milling and chrome recovery have supported increased chrome concentrate output, and ongoing development at 3 Shaft is expected to enhance efficiency. Booysendal's strong PGM production reflects both asset quality and operational expertise, although preferential milling of Merensky ore to manage stockpiles temporarily reduced chrome concentrate output. At Eland, production continues to ramp up despite two fatal incidents, with stopping production on target and improvements in UG2 ore milling and concentrator upgrades boosting recoveries. Northam maintains its full-year production guidance, underpinned by the long-term quality and resilience of its operations.

Life Healthcare Group Holdings Limited (LHC) +3.51%

Life Healthcare has concluded an agreement to sell its 100% stake in Life Molecular Imaging (LMI) to Lantheus Holdings Inc. for $750 million, consisting of a $350 million upfront payment and potential earnouts of $400 million based on product sales milestones through 2034. The deal enables Life Healthcare to retain economic benefits through a sub-license agreement with Lantheus. Following the settlement of obligations, net proceeds from the upfront payment, estimated at $200 million, will be returned to shareholders within 12 months of the transaction’s completion, pending board approval. This strategic divestment aligns with Life Healthcare’s focus on Southern Africa, streamlining operations and unlocking immediate value while providing shareholders with exposure to LMI’s future growth through earnouts. LMI, which develops radiopharmaceuticals like NeuraCeq® for Alzheimer's diagnosis, complements Lantheus’s strengths in nuclear medicine. The deal is set to strengthen Life Healthcare’s position as a leading healthcare provider in Southern Africa, while LMI stands to benefit from Lantheus’s enhanced capabilities.

Tharisa Plc (THA) -2.73%

Life Healthcare has concluded an agreement to sell its 100% stake in Life Molecular Imaging (LMI) to Lantheus Holdings Inc. for $750 million, consisting of a $350 million upfront payment and potential earnouts of $400 million based on product sales milestones through 2034. The deal enables Life Healthcare to retain economic benefits through a sub-license agreement with Lantheus. Following the settlement of obligations, net proceeds from the upfront payment, estimated at $200 million, will be returned to shareholders within 12 months of the transaction’s completion, pending board approval. This strategic divestment aligns with Life Healthcare’s focus on Southern Africa, streamlining operations and unlocking immediate value while providing shareholders with exposure to LMI’s future growth through earnouts. LMI, which develops radiopharmaceuticals like NeuraCeq® for Alzheimer's diagnosis, complements Lantheus’s strengths in nuclear medicine. The deal is set to strengthen Life Healthcare’s position as a leading healthcare provider in Southern Africa, while LMI stands to benefit from Lantheus’s enhanced capabilities.

Moderna Inc. (MRNA) -16.80%

Moderna has reduced its 2025 revenue guidance by approximately $1 billion, projecting sales between $1.5 billion and $2.5 billion, primarily weighted toward the latter half of the year. This revision reflects challenges tied to declining demand for its Covid vaccine, once the company’s flagship product, and efforts to adapt to market shifts. The updated forecast marks a significant reduction from the $2.5 billion to $3.5 billion range projected in September, when the company anticipated breaking even on operating cash by 2028, delayed from the previously estimated 2026. Moderna remains focused on expanding its portfolio, with plans to secure 10 new product approvals by 2028, including three potential approvals in 2025. While its Covid and RSV shots delivered $3 billion to $3.1 billion in 2024 revenue, this represents a sharp decline from $6.7 billion in 2023 and $18 billion in 2022. The company's strategy includes developing combination vaccines, such as a Covid-flu shot, as it seeks to regain momentum ahead of the JPMorgan Healthcare Conference.

Robinhood Markets Inc. (HOOD) -1.22%

Robinhood Markets has agreed to pay $45 million to settle charges brought by the U.S. Securities and Exchange Commission (SEC) over violations related to record-keeping, trade reporting, and other regulatory requirements. The SEC found that Robinhood Securities LLC and Robinhood Financial LLC failed to accurately report trading activity, file timely suspicious activity reports, maintain records, and comply with short sale rules. Additionally, Robinhood admitted to deficiencies in retaining work-related communications via messaging apps and other "off-channel" platforms, as well as shortcomings in handling blue sheet trading data and addressing cybersecurity risks. Robinhood’s General Counsel, Lucas Moskowitz, expressed satisfaction with resolving the issues, marking another step in the firm's efforts to navigate its regulatory challenges.

Norwegian Air Shuttle ASA (NAS) -5.38%

Norwegian Air has revised its 2024 operating profit forecast downward, attributing the adjustment to the weakening of the Norwegian crown against the U.S. dollar. The budget airline now anticipates a full-year operating profit of approximately 1.85 billion Norwegian crowns ($161.04 million), a reduction from its earlier October projection of 2.1 to 2.4 billion crowns. This highlights the significant impact of currency fluctuations on the airline's financial performance.

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