You may not have heard of it a year ago Moderna (NASDAQ: MRNA). The clinical stage biotech company’s messenger RNA (mRNA) drug candidates were in preclinical or early human trials for indications such as cancer, autoimmune diseases and viruses such as Zika. The shares traded at approximately $ 19 per share and the market value was $ 6 billion.
But Moderna spent most of 2020 making headlines. That’s because this biotech company entered the coronavirus vaccination race early on. So much so that it became the first to market a candidate vaccine in human trials. That was in March. Obviously everyone is talking about Moderna now. So let’s take a closer look at what’s next for this biotech company.
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Give instructions to cells
Moderna, such as rival Pfizer (NYSE: PFE) and his partner BioNTech (NASDAQ: BNTX), has developed a candidate vaccine for mRNA. These vaccines work by instructing cells to produce a protein from the coronavirus. The immune system then makes antibodies against that protein, as if it were actually fighting the virus. This differs from traditional vaccines, which introduce an attenuated virus into the body to trigger an immune response.
The U.S. Food and Drug Administration (FDA) on Friday offered an Emergency Use Authorization (EUA) to the Pfizer / BioNTech team for their vaccine. That has allowed the couple to immediately sell the product. At the same time, the two companies will continue to collect trial data that supports a request for full approval.
Now it’s Moderna’s turn. The FDA will meet with an advisory panel of industry experts on Dec. 17 to discuss Moderna’s candidate. The committee will vote at the end of the meeting whether the FDA should approve the investigational vaccine. The FDA is under no obligation to follow the committee’s advice. But the regulator is taking the panel’s opinion seriously. In Pfizer’s case, the panel voted 17 to four for an EUA. There was one abstinence.
Will Moderna follow in Pfizer’s footsteps? There are of course no guarantees. But based on the data we have, it’s reasonable to be optimistic. The Moderna vaccine candidate showed 94.1% efficacy in the phase 3 study. And the company said it was safe and generally well-tolerated.
A champion in the prevention of serious illness
Most importantly, the Moderna candidate was 100% effective in preventing severe cases of COVID-19. Pfizer reported one case of severe coronavirus in its vaccinated group versus nine in its placebo group. Moderna reported zero cases of serious illness in those who received the vaccine and 30 in those who received a placebo. This is important because the severe cases are hospital systems leading to a higher rate of deaths.
Investors will be talking about Moderna even more than usual this week. That’s because the FDA’s decision is critical to the company. An authorization would mean instant product revenue. Otherwise, since Moderna’s closest to the market programs are in Phase 2 studies, actual product sales are years away.
Moderna’s vaccine prices may vary depending on the size of the deal and other factors. But let’s use the price of $ 15 per dose paid by the U.S. government to give us an idea of how much revenue to expect. Moderna’s orders so far – from different countries – represent a total of approximately 390 million doses. At that price, Moderna would generate more than $ 5.8 billion in revenue.
We know Pfizer will share the market. And others may be very close in the vaccination race. Companies including AstraZeneca (NASDAQ: AZN), Novavax (NASDAQ: NVAX), and Johnson & Johnson (NYSE: JNJ) candidates in phase 3 studies. Given the global need for a vaccine, I wouldn’t expect a drop in Moderna’s sales anytime soon – even if the FDA grants EUAs to several companies. That said, investors should keep an eye on the competitive landscape after the pandemic is over and further into the future.
Meanwhile, Moderna’s shares are up more than 700% this year and its market cap has reached $ 63 billion.
MRNA data by YCharts
If the FDA grants the biotech company an EUA, the stock can go even further – at that point, and again once the earnings come in. In that case, I expect that Moderna will not only be the topic of conversation in the last weeks of 2020, but for the whole of 2021.