Few companies can rightly claim to have had a major impact on human history. Modern (NASDAQ: MRNA) is perhaps an exception. The rapid development by biotech of a highly effective COVID-19 vaccine could help end the global pandemic.
It’s no surprise that Moderna has been a big winner for investors, with its stocks up nearly 800% since the beginning of 2020. But is Moderna stock now a buy after this massive gain?
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Short-term catalysts
Moderna has already won an emergency use permit (EUA) for COVID-19 vaccine mRNA-1273 in multiple countries, including the US and the European Union (EU). Millions of people have received the vaccine. So are there any short-term catalysts for inventory? Sure.
Granted, the types of catalysts that could be on the way in 2021 are unlikely to move the needle like Moderna’s exciting announcements about mRNA-1273’s efficacy last year. However, the company could continue to enter into additional supply agreements with governments. Countries with existing supply agreements could also increase the number of doses ordered, as the US recently did.
Stocks of Moderna could rise this year by beating Wall Street’s quarterly earnings estimates. One way it could achieve this is by delivering more doses earlier than expected. Just this week, the company announced it expects to deliver its second shipment of 100 million doses to the US in late May, rather than the end of June, as originally expected. It also plans to deliver the third shipment of 100 million doses to the US by the end of July – two months ahead of schedule.
Also remember that the pain of another vaccine manufacturer could be Moderna’s profit. If one of its rivals stumbles in meeting their delivery goals, or if other issues are identified with competing COVID-19 vaccines, Moderna’s stock price is likely to rise.
Long term outlook
There could be an even better picture of Moderna’s long-term outlook. The company should generate about $ 15 billion from mRNA-1273 this year. Much of that could be recurring revenues if the COVID-19 market is like the seasonal flu vaccine market, and chances are pretty good that that’s exactly what will happen.
But the bigger story revolves around Moderna’s pipeline. The biotech plans to bring the cytomegalovirus (CMV) vaccine candidate mRNA-1647 into a late stage of research this year. There are currently no approved CMV vaccines. Moderna thinks mRNA-1647 could generate peak annual sales of between $ 2 billion and $ 5 billion if approved.
The company’s Zika vaccine candidate mRNA-1893 should go into phase 2 testing by 2021. Moderna’s pipeline includes 10 other experimental messenger RNA (mRNA) vaccines and therapies in Phase 1 or Phase 2 assays. The biotech plans to add at least six more vaccine candidates to the list for early-stage testing this year: an Epstein-Barr virus (EBV) vaccine, three flu vaccines and two HIV vaccines.
In 2019, the global vaccine market was $ 35 billion. More than 80 new viruses have been discovered in the past four decades. Only 4% of these viruses have an approved vaccine on the US market.Moda’s long-term opportunity is to apply its mRNA technology to both fight viruses with existing vaccines and develop better virus vaccines with vaccines already on the market to be.
Another purchase?
One view of Moderna is that it is overvalued. The company’s market cap of nearly $ 70 billion is much higher than the market cap of successful, established biotech companies such as Biogen and RegeneronThere is no guarantee that Moderna’s recurring revenues will be as high as what it is likely to make in 2021, and the pipeline candidates are still several years away from potential approval.
Another view focuses on Moderna’s ability to shake up the vaccine market in the coming years. The company has shown what it can do with its COVID-19 vaccine and plans to pursue a flush-and-repeat strategy targeting other viruses.
I believe there are other biotech stocks that are likely to yield higher returns than Moderna in 2021. However, I keep thinking Moderna is a solid choice for long-term investors with the patience to wait for the company’s mRNA platform to be fulfilled. its potential.