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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 September 30, 2021 OR ☐    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 o 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 o 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. o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of October 29, 2021, there were 405,449,527 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 that are based on our management’s belief 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) and third-party and governmental arrangements and potential arrangements; •our ability to contract with third-party suppliers 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 candidate, 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; •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 successfully commercialize any future products, if approved; •the pricing and reimbursement of our investigational medicines, if approved; •the implementation of our business model, and strategic plans for our business, 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 or treatments that are or may become available as an alternative to our products; •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 statements can be identified by terminology 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 statements are only predictions. You should not place undue reliance on 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. 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 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 to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable 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 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 to 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. 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 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) 6 Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 6 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 7 Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020 8 Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2021 and 2020 9 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 11 Notes to Condensed Consolidated Financial Statements 12 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 3. Quantitative and Qualitative Disclosures about Market Risk 48 Item 4. Controls and Procedures 49 PART II. Item 1. Legal Proceedings 49 Item 1A. Risk Factors 49 Item 6. Exhibits 50 SIGNATURES 51 Table of Contents Item 1. Financial Statements MODERNA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in millions, except per share data) September 30, December 31, 2021 2020 Assets Current assets: Cash and cash equivalents $ 5,550  $ 2,624  Investments 3,356  1,984  Accounts receivable 3,142  1,391  Inventory 965  47  Prepaid expenses and other current assets 412  252  Total current assets 13,425  6,298  Investments, non-current 6,442  639  Property and equipment, net 845  297  Right-of-use assets, operating leases 115  90  Restricted cash, non-current 11  11  Deferred tax assets 81  —  Other non-current assets 4  2  Total assets $ 20,923  $ 7,337  Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 87  $ 18  Accrued liabilities 1,076  470  Deferred revenue 7,977  3,867  Income taxes payable 565  —  Other current liabilities 252  34  Total current liabilities 9,957  4,389  Deferred revenue, non-current 498  177  Operating lease liabilities, non-current 105  97  Financing lease liabilities, non-current 238  110  Other non-current liabilities 1  3  Total liabilities 10,799  4,776  Commitments and contingencies (Note 12) Stockholders’ equity: Preferred stock, par value $0.0001; 162 shares authorized as of September 30, 2021 and December 31, 2020; no shares issued or outstanding at September 30, 2021 and December 31, 2020 —  —  Common stock, par value $0.0001; 1,600 shares authorized as of September 30, 2021 and December 31, 2020; 405 and 399 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively —  —  Additional paid-in capital 5,003  4,802  Accumulated other comprehensive income 31  3  Retained earnings (accumulated deficit) 5,090  (2,244) Total stockholders’ equity 10,124  2,561  Total liabilities and stockholders’ equity $ 20,923  $ 7,337  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 Table of Contents MODERNA, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in millions, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue: Product sales $ 4,810  $ —  $ 10,740  $ —  Grant revenue 140  145  473  187  Collaboration revenue 19  12  47  45  Total revenue 4,969  157  11,260  232  Operating expenses: Cost of sales 722  —  1,665  —  Research and development 521  344  1,343  611  Selling, general and administrative 168  48  366  109  Total operating expenses 1,411  392  3,374  720  Income (loss) from operations 3,558  (235) 7,886  (488) Interest income 4  6  11  21  Other expense, net (10) (3) (22) (6) Income (loss) before income taxes 3,552  (232) 7,875  (473) Provision for income taxes 219  1  541  1  Net income (loss) $ 3,333  $ (233) $ 7,334  $ (474) Earnings (loss) per share: Basic $ 8.27  $ (0.59) $ 18.25  $ (1.26) Diluted $ 7.70  $ (0.59) $ 17.00  $ (1.26) Weighted average common shares used in calculation of earnings (loss) per share: Basic 404  395  402  376  Diluted 434  395  431  376  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 Table of Contents MODERNA, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited, in millions) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income (loss) $ 3,333  $ (233) $ 7,334  $ (474) Other comprehensive income (loss), net of tax: Available-for-sales securities: Unrealized (losses) gains on available-for-sale debt securities (3) (3) (10) 2  Less: net realized (gains) losses on available-for-sale securities reclassified in net income (loss) (1) —  (2) 1  Net (decrease) increase from available-for-sale debt securities (4) (3) (12) 3  Cash flow hedges: Unrealized gains on derivative instruments 30  —  51  —  Less: net realized (gains) on derivative instruments reclassified in net income (11) —  (11) —  Net increase from derivatives designated as hedging instruments 19  —  40  —  Total other comprehensive income (loss) 15  (3) 28  3  Comprehensive income (loss) $ 3,348  $ (236) $ 7,362  $ (471) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 Table of Contents MODERNA, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Unaudited, in millions) Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income Retained Earnings Total Stockholders’ Equity Shares Amount Balance at June 30, 2021 403  $ —  $ 4,931  $ 16  $ 1,757  $ 6,704  Exercise of options to purchase common stock 2  —  32  —  —  32  Stock-based compensation —  —  40  —  —  40  Other comprehensive income, net of tax —  —  —  15  —  15  Net income —  —  —  —  3,333  3,333  Balance at September 30, 2021 405  $ —  $ 5,003  $ 31  $ 5,090  $ 10,124  Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at June 30, 2020 393  $ —  $ 4,677  $ 8  $ (1,738) $ 2,947  Exercise of options to purchase common stock 2  —  27  —  —  27  Stock-based compensation —  —  22  —  —  22  Other comprehensive loss, net of tax —  —  —  (3) —  (3) Net loss —  —  —  —  (233) (233) Balance at September 30, 2020 395  $ —  $ 4,726  $ 5  $ (1,971) $ 2,760  9 Table of Contents 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 6  —  91  —  —  91  Purchase of common stock under employee stock purchase plan —  —  5  —  —  5  Stock-based compensation —  —  105  —  —  105  Other comprehensive income, net of tax —  —  —  28  —  28  Net income —  —  —  —  7,334  7,334  Balance at September 30, 2021 405  $ —  $ 5,003  $ 31  $ 5,090  $ 10,124  Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2019 337  $ —  $ 2,670  $ 2  $ (1,497) $ 1,175  Proceeds from public offering of common stock, net of issuance costs of $2 48  —  1,853  —  —  1,853  Exercise of options to purchase common stock 10  —  133  —  —  133  Purchase of common stock under employee stock purchase plan —  —  3  —  —  3  Stock-based compensation —  —  67  —  —  67  Other comprehensive income, net of tax —  —  —  3  —  3  Net loss —  —  —  —  (474) (474) Balance at September 30, 2020 395  $ —  $ 4,726  $ 5  $ (1,971) $ 2,760  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 10 Table of Contents MODERNA, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in millions) Nine Months Ended September 30, 2021 2020 Operating activities Net income (loss) $ 7,334  $ (474) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation 105  67  Depreciation and amortization 154  24  Amortization/accretion of investments 33  5  Deferred income taxes (89) —  Changes in assets and liabilities: Accounts receivable (1,751) (185) Prepaid expenses and other assets (186) (68) Inventory (918) —  Right-of-use assets, operating leases (25) (13) Accounts payable 26  14  Accrued liabilities 600  132  Deferred revenue 4,431  1,240  Income taxes payable 565  —  Operating lease liabilities 8  14  Other liabilities 23  7  Net cash provided by operating activities 10,310  763  Investing activities Purchases of marketable securities (10,279) (2,326) Proceeds from maturities of marketable securities 1,075  748  Proceeds from sales of marketable securities 1,983  140  Purchases of property and equipment (164) (44) Net cash used in investing activities (7,385) (1,482) Financing activities Proceeds from public offerings of common stock, net of issuance costs —  1,853  Proceeds from issuance of common stock through equity plans, net 96  136  Changes in financing lease liabilities (96) —  Net cash provided by financing activities —  1,989  Net increase in cash, cash equivalents and restricted cash 2,925  1,270  Cash, cash equivalents and restricted cash, beginning of year 2,636  248  Cash, cash equivalents and restricted cash, end of period $ 5,561  $ 1,518  Non-cash investing and financing activities Purchases of property and equipment included in accounts payable and accrued liabilities $ 66  $ 13  Right-of-use assets obtained through finance lease modifications and reassessments $ 364  $ 46  Right-of-use assets obtained in exchange for financing lease liabilities $ 126  $ —  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 11 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) was incorporated in Delaware on July 22, 2016. We are the successor in interest to Moderna LLC, a limited liability company formed under the laws of the State of Delaware in 2013. Our principal executive office is located at 200 Technology Square, Cambridge, MA. We are a biotechnology company creating a new generation of transformative medicines based on messenger RNA (mRNA), to improve the lives of patients. mRNA medicines are designed to direct the body’s cells to produce intracellular, membrane, or secreted proteins that have a therapeutic or preventive benefit with the potential to address a broad spectrum of diseases. 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 vaccines and therapeutics 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) in individuals 18 years of age or older. We have also received authorization for our COVID-19 vaccine from health agencies in more than 60 countries and from the World Health Organization. Additional authorizations are currently under review in other countries. In addition, we have received authorization for our COVID-19 vaccine for use in adolescents in the United Kingdom, European Union, Japan, Canada, Switzerland, Taiwan, Saudi Arabia, Australia, and the Philippines, and have pending applications for authorization to administer the vaccine to adolescents with regulatory agencies in the United States and other countries. The FDA has approved an update to the EUA for the Moderna COVID-19 vaccine to include a third dose at the 100 µg level for immunocompromised individuals 18 years of age or older in the United States, as well as the administration of 50 µg booster doses for individuals age 65 and older, people aged 18 to 64 who are at high risk of severe COVID-19, and people aged 18 to 64 with frequent institutional or occupational exposure to SARS-CoV-2. In October 2021, the U.S. Advisory Committee on Immunization Practices (ACIP) also endorsed recommending the Moderna COVID-19 Vaccine as a booster, regardless of the original vaccine received by an individual in their primary series. The European Medicines Agency (EMA) has also authorized a third dose of the Moderna COVID-19 vaccine given at least 28 days after the second dose to severely immunocompromised individuals 12 years of age or older, as well as the administration of 50 µg booster doses for individuals 18 years of age and older. In August 2021, we completed the rolling submission process with the FDA for a Biologics License Application (BLA) for our COVID-19 vaccine, which is subject to Priority Review. As of September 30, 2021, we had 37 mRNA development programs in our portfolio with 22 having entered the clinic. In the third quarter of 2021, we refined the way we track our development programs and now separately track each indication of our COVID-19 and RSV vaccine candidates, which resulted in an increase in the number of our development programs. We have incurred significant expenses in connection with the discovery, development and commercialization of our products, and we expect to continue to incur significant expenses for the foreseeable future. We anticipate that our expenses will increase significantly in connection with the ongoing development and commercialization of our COVID-19 vaccine and ongoing activities to support our platform research, drug discovery and clinical development, including development of any new generations of boosters and vaccines against variants of SARS-CoV-2 and vaccines against other respiratory diseases, infrastructure and Research Engine and Early Development Engine (which includes our Moderna Technology Center), digital infrastructure, creation of a portfolio of intellectual property, and administrative support. We may finance our future cash needs that exceed our operating costs through a combination of public or private equity offerings, structured financings and debt financings, government funding arrangements, strategic alliances and marketing, manufacturing, distribution and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements on favorable terms, or at all. 12 Table of Contents We believe that our cash, cash equivalents, and investments as of September 30, 2021 will be sufficient to enable us to fund our projected operations through at least the next 12 months from the issuance of these financial statements. We are subject to numerous risks and uncertainties associated with pharmaceutical development and commercialization, and we are unable to predict the timing or amount of expenses or if we will be able to maintain profitability. If we are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations. 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, 2020 (2020 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 consolidated financial statements in our 2020 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 nine months ended September 30, 2021 are consistent with those described in our 2020 Form 10-K, except for “Derivative financial instruments” disclosed within Note 6. 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, research and development expenses, stock-based compensation, leases, fair value of financial instruments, derivative financial instruments, inventory, useful lives of property and equipment, income taxes and our valuation allowance on our deferred tax assets. The actual results that we experience may differ materially from our estimates. Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss) and other comprehensive income (loss) for the period. Other comprehensive income (loss) consists of unrealized gains/losses and gains/losses on our investments and derivatives designated as hedging instruments. Total comprehensive income (loss) for all periods presented has been disclosed in the condensed consolidated statements of comprehensive income (loss). 13 Table of Contents The components of accumulated other comprehensive income for the three and nine months ended September 30, 2021 were as follows (in millions):  Unrealized Loss on Available-for-Sale Debt Securities Net Unrealized Gains on Derivatives Designated As Hedging Instruments Total Accumulated other comprehensive income, balance at December 31, 2020 $ 3  $ —  $ 3  Other comprehensive loss (2) —  (2) Accumulated other comprehensive income, balance at March 31, 2021 1  —  1  Other comprehensive (loss) income (6) 21  15  Accumulated other comprehensive income, balance at June 30, 2021 $ (5) $ 21  $ 16  Other comprehensive (loss) income (4) 19  15  Accumulated other comprehensive income, balance at September 30, 2021 $ (9) $ 40  $ 31  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): September 30, 2021 2020 Cash and cash equivalents $ 5,550  $ 1,506  Restricted cash —  1  Restricted cash, non-current 11  11  Total cash, cash equivalents and restricted cash shown in the condensed consolidated     statements of cash flows $ 5,561  $ 1,518  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 In December 2020, we began selling our COVID-19 vaccine to the U.S. Government and international governments. Under the supply agreements with these governments, we received or billed for upfront deposits for our future vaccine supply, which are initially recorded as deferred revenue. We recognize revenue based on the fixed price per dose when control of the product has transferred and customer acceptance has occurred as applicable, unless such acceptance provisions are deemed perfunctory. Product sales by customer geographic location was as follows (in millions): Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 United States $ 1,197  $ 4,648  Rest of world 3,613  6,092  Total $ 4,810  $ 10,740  There were no product sales for the three and nine months ended September 30, 2020. As of September 30, 2021, our COVID-19 vaccine was our only commercial product authorized for use. 14 Table of Contents As of September 30, 2021 and December 31, 2020, we had deferred revenue of $8.3 billion and $3.8 billion, respectively, related to customer deposits. We expect $7.9 billion of our deferred revenue related to customer deposits as of September 30, 2021 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 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 vaccines and therapeutics. As of September 30, 2021, the committed funding, net of revenue earned, was $4 million. An additional $43 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. In July 2020, we amended our agreement with BARDA to provide for an additional commitment of up to $472 million to support late-stage clinical development of mRNA-1273, including the execution of a 30,000 participant Phase 3 study in the U.S. We further amended the agreement in March 2021 to provide for an additional commitment of $63 million to further support late-stage clinical development, including Phase 2/3 mRNA-1273 pediatric studies. In April 2021, we entered into a further amendment to the BARDA agreement, increasing the amount of potential reimbursements by $236 million in connection with costs associated with the Phase 3 clinical trials for mRNA-1273 and pharmacovigilance efforts. In June 2021, the agreement with BARDA was further amended to award additional funding of $144 million to support pediatric clinical trials for mRNA-1273. The maximum award from BARDA, inclusive of the 2020 and 2021 amendments, was approximately $1.4 billion. Under the terms of the agreement, BARDA will fund the advancement of mRNA-1273 to FDA licensure. All contract options have been exercised. As of September 30, 2021, the remaining available funding, net of revenue earned, was $441 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. Three of the four contract options have been exercised. As of September 30, 2021, the remaining available funding, net of revenue earned, was $55 million, with an additional $8 million available if the final contract option is exercised. 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 September 30, 2021, 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 as of and for the periods presented (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 BARDA $ 128  $ 143  $ 454  $ 183  Other grant revenue 12  2  19  4  Total grant revenue $ 140  $ 145  $ 473  $ 187  15 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 September 30, 2021 and December 31, 2020, 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 2020 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 September 30, Nine Months Ended September 30, Collaboration Revenue by Strategic Collaborator: 2021 2020 2021 2020 AstraZeneca $ 3  $ —  $ 7  $ 17  Merck 7  6  11  18  Vertex 5  6  23  10  Other 4  —  6  —  Total collaboration revenue $ 19  $ 12  $ 47  $ 45  The following table presents changes in the balances of our receivables and contract liabilities related to our strategic collaboration agreements during the nine months ended September 30, 2021 (in millions): December 31, 2020 Additions Deductions September 30, 2021 Contract Assets: Accounts receivable $ 6  $ 21  $ (21) $ 6  Contract Liabilities: Deferred revenue $ 240  $ 23  $ (45) $ 218  As of September 30, 2021, the aggregated amount of the transaction price allocated to performance obligations under our collaboration agreements that are unsatisfied or partially unsatisfied was $310 million. 16 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 September 30, 2021 and December 31, 2020 (in millions): September 30, 2021 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Current Marketable Securities Non- Current Marketable Securities Cash and cash equivalents $ 5,550  $ —  $ —  $ 5,550  $ 5,550  $ —  $ —  Available-for-sale: Certificates of deposit 85  —  —  85  —  85  —  U.S. treasury bills 95  —  —  95  —  95  —  U.S. treasury notes 6,557  1  (5) 6,553  —  2,046  4,507  Corporate debt securities 2,956  1  (4) 2,953  —  1,118  1,835  Government debt securities 113  —  (1) 112  —  12  100  Total $ 15,356  $ 2  $ (10) $ 15,348  $ 5,550  $ 3,356  $ 6,442  December 31, 2020 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash and Cash Equivalents Current Marketable Securities Non- Current Marketable Securities Cash and cash equivalents $ 2,624  $ —  $ —  $ 2,624  $ 2,624  $ —  $ —  Available-for-sale: Certificates of deposit 239  —  —  239  —  215  24  U.S. treasury bills 492  —  —  492  —  492  —  U.S. treasury notes 87  —  —  87  —  38  49  Corporate debt securities 1,788  4  —  1,792  —  1,239  553  Government debt securities 13  —  —  13  —  —  13  Total $ 5,243  $ 4  $ —  $ 5,247  $ 2,624  $ 1,984  $ 639  The amortized cost and estimated fair value of marketable securities by contractual maturity at September 30, 2021 and December 31, 2020 were as follows (in millions): September 30, 2021 Amortized Cost Estimated Fair Value Due in one year or less $ 3,356  $ 3,356  Due after one year through five years 6,450  6,442  Total $ 9,806  $ 9,798  December 31, 2020 Amortized Cost Estimated Fair Value Due in one year or less $ 1,981  $ 1,984  Due after one year through five years 638  639  Total $ 2,619  $ 2,623  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. 17 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 nine months ended September 30, 2021 and 2020. We did not recognize any credit-related allowance to available-for-sale securities as of September 30, 2021 and December 31, 2020. As of September 30, 2021 and December 31, 2020, we did not have material gross unrealized losses. We neither intend to sell these investments, nor do we believe that we are more-likely-than-not to conclude we will have to sell them before recovery of their carrying values. We also believe that we will be able to collect both principal and interest amounts due to us at maturity. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used to value the assets and liabilities: •Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; •Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or •Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 (in millions): Fair value at September 30, 2021 Fair Value Measurement Using Level 1 Level 2 Assets: Money market funds $ 4,606  $ 4,606  $ —  Certificates of deposit 85  —  85  U.S. treasury bills 95  —  95  U.S. treasury notes 6,553  —  6,553  Corporate debt securities 2,953  —  2,953  Government debt securities 112  —  112  Derivative instruments (Note 7) 51  —  51  Total $ 14,455  $ 4,606  $ 9,849  Liabilities: Derivative instruments (Note 7) $ 1  $ —  $ 1  18 Table of Contents Fair value at December 31, 2020 Fair Value Measurement Using Level 1 Level 2 Assets: Money market funds $ 660  $ 660  $ —  Certificates of deposit 239  —  239  U.S. treasury bills 492  —  492  U.S. treasury notes 87  —  87  Corporate debt securities 1,792  —  1,792  Government debt securities 13  —  13  Total $ 3,283  $ 660  $ 2,623  As of September 30, 2021 and December 31, 2020, 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. 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. 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 (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 operations. 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 operations. As of September 30, 2021, we had net deferred gains of $48 million on our foreign currency forward contracts included in AOCI that are expected to be recognized into product sales within the next 12 months. 19 Table of Contents 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 in Euro and lease liabilities in 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 operations. 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 operations. Total gross notional amount and fair value of our foreign currency derivatives were as follows (in millions): September 30, 2021 Notional Amount Fair Value Asset (1) Liability (2) Derivatives designated as cash flow hedging instruments: Foreign currency forward contracts $ 1,436  $ 48  $ —  Derivatives not designated as hedging instruments: Foreign currency forward contracts 556  3  1  Total derivatives $ 1,992  $ 51  $ 1  December 31, 2020 Notional Amount Fair Value Asset (1) Liability (2) Derivatives not designated as hedging instruments: Foreign currency forward contracts $ 368  $ —  $ —  Total derivatives $ 368  $ —  $ —  _________ (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 (loss) for the three and nine months ended September 30, 2021 were as follows (in millions): Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Derivatives in cash flow hedging relationships: Foreign currency forward contracts $ 30  $ 51  20 Table of Contents The effect of our foreign currency derivatives in our condensed consolidated statements of operations for the three and nine months ended September 30, 2021 was as follows (in millions): Statement of Operations Classification Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Derivatives in cash flow hedging relationships: Foreign currency forward contracts Net gain reclassified from AOCI into income Product sales $ (11) $ (11) Derivatives not designated as hedging instruments: Foreign currency forward contracts Net realized and unrealized gain (loss) Other expense, net $ 3  $ (16) There were no hedging activities for the three and nine months ended September 30, 2020. 8. Inventory Inventory as of September 30, 2021 and December 31, 2020 consists of the following (in millions): September 30, December 31, 2021 2020 Raw materials $ 605  $ 37  Work in progress 233  9  Finished goods 127  1  Total inventory $ 965  $ 47  9. Property and Equipment, Net Property and equipment, net, as of September 30, 2021 and December 31, 2020 consists of the following (in millions): September 30, December 31, 2021 2020 Laboratory equipment $ 152  $ 121  Leasehold improvements 231  180  Furniture, fixtures and other 8  5  Computer equipment and software 15  13  Internally developed software 9  7  Right-of-use asset, financing (Note 11) 546  56  Construction in progress 158  35  Total 1,119  417  Less: Accumulated depreciation (274) (120) Property and equipment, net $ 845  $ 297  Depreciation and amortization expense for the three months ended September 30, 2021 and 2020 was $70 million and $8 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2021 and 2020 was $154 million and $24 million, respectively. 21 Table of Contents 10. Other Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets, as of September 30, 2021 and December 31, 2020 consists of the following (in millions): September 30, December 31, 2021 2020 Down payments to manufacturing vendors $ 156  $ 217  Other prepaid expenses 105  7  Value added tax receivable 57  7  Derivative assets 51  —  Other current assets 43  21  Prepaid expenses and other current assets $ 412  $ 252  Accrued Liabilities Accrued liabilities, as of September 30, 2021 and December 31, 2020 consists of the following (in millions): September 30, December 31, 2021 2020 Clinical trials $ 166  $ 98  Raw materials 141  78  Royalties 168  —  Development operations 125  29  Manufacturing 196  53  Other external goods and services 87  92  Compensation-related 105  95  Other 88  25  Accrued liabilities $ 1,076  $ 470  Other Current Liabilities Other current liabilities, as of September 30, 2021 and December 31, 2020 consists of the following (in millions): September 30, December 31, 2021 2020 Lease liabilities - financing (Note 11) $ 218  $ 24  Lease liabilities - operating (Note 11) 22  6  Other 12  4  Other current liabilities $ 252  $ 34  Deferred Revenue The following table summarizes the activities in deferred revenue for the nine months ended September 30, 2021 (in millions): December 31, 2020 Additions Deductions September 30, 2021 Product sales $ 3,799  $ 9,615  $ (5,163) $ 8,251  Grant revenue 5  20  (19) 6  Collaboration revenue 240  23  (45) 218  Total deferred revenue $ 4,044  $ 9,658  $ (5,227) $ 8,475  22 Table of Contents 11. Leases We have entered into various long-term non-cancelable lease arrangements for our facilities and equipment expiring at various times through 2035. 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. We have two campuses in Massachusetts, our Cambridge facility and our Moderna Technology Center, located in Norwood. We also lease other office spaces globally for our business operations. Operating Leases Cambridge facility 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 facility leases have expiry ranges from 2022 to 2029. Finance Leases Moderna Technology Center We have an industrial technology center in Norwood, Massachusetts, our Moderna Technology Center (MTC), which comprises three buildings, MTC South, MTC North, and MTC East. In August 2016, we entered into a lease agreement for approximately 200,000 square feet of office, laboratory, and light manufacturing space (MTC South). The lease will expire in September 2032. We have the option to extend the term for two extension periods of ten years each at market-based rents. In February 2019, we entered into a lease agreement for office and laboratory space of approximately 200,000 square feet (MTC North). The lease commenced in the second quarter of 2019 and had an initial expiration date of 2031. We have the option to extend the lease for up to four additional five-year terms. In May 2020, we entered into an amendment to the lease whereby we exercised an option available in the original lease to receive a tenant improvement allow