April 7, 2021
5 minutes of reading
This story originally appeared on MarketBeat
More than two years ago Moderna (NASDAQ: MRNA) is a relative unknown in the investment world. The Massachusetts-based biotechnology company made its public market debut in the hope that investors would adopt the company’s new approach to drug and vaccine development. My times have changed.
Moderna is now a household name among investors and non-investors after beating dozens of companies vying for COVID-19 vaccine. Its share price surged to almost $ 190 in February 2021 due to expectations of a big gust of wind. It has been there since pull back more than 30% presents an attractive entry point for a company with the potential to outgrow coronavirus.
What is Moderna’s COVID-19 outlook?
With Johnson & Johnson and Pfizer-BioNTech, Moderna’s COVID-19 vaccine is one of three approved vaccines in the US and is being administered in other countries. It was a remarkable achievement of being the company of these pharmaceutical giants, and one that definitely put Moderna on the map.
With vaccine distribution going well, the company’s upcoming financial results will stand out. Moderna has reached vaccine sales deals worth more than $ 18 billion and is preparing for the possibility that more vaccines are on the way.
This week, drug maker Catalent announced that it is expanding production of Moderna’s COVID-19 spray. The deal will almost double vaccine production at Catalent’s Indiana plant into effect this month to about 400 vials per minute. At this rate, an additional 80 million jars will be filled each year.
But Moderna doesn’t stop there. Realizing the shortcomings of the two-dose COVID-19 regimen, they are also developing a single-dose vaccine that can be stored in a conventional refrigerator. Positive results from that ongoing research could help the stock rally once again at $ 200.
So Moderna could make progress with another COVID-19 vaccine as well. This next generation COVID-19 vaccine aims to address the possibility of more variants of the coronavirus. With global variants of the disease there is a risk of hindering economic recovery, obviously, a stronger coronavirus vaccine is needed – and Moderna is once again a step ahead of its competition.
What other growth opportunities does Moderna have?
Moderna may forever be linked to COVID-19, but eventually, the pandemic will enter history. The company will return to focus on developing other treatments and vaccines based on its information RNA (mRNA) technology.
The mRNA vaccine is a new way to protect people from infectious diseases that do not introduce weakened bacteria into the body. Instead, they train cells to make a protein that triggers an immune response. This method has all the potential for vaccination against infectious diseases, heart disease, immune disorders and even some cancers.
Moderna’s development roadmap includes some promising early and mid-stage candidates. More than half of its 24 mRNA candidates are in clinical research. Earlier this year, they launched three new vaccine programs designed to target the seasonal flu virus, HIV and Nipah. It also announced a partnership with Vertex Pharmaceuticals to develop a new treatment for cystic fibrosis.
The most exciting show going on at Moderna may be its collaboration with Merck. This involves personalized cancer vaccine candidates targeting a patient’s specific tumor associated with Keytruda. Late last year, it published positive phase 1 data from a trial involving patients with squamous cell carcinoma of the head and neck (HNSCC).
Is it a good time to buy Moderna stock?
Now down to around $ 130 per share, Moderna’s risk-reward profile is more bearable. In terms of the risk of the equation, of course there’s headline risk going on around the company’s current COVID-19 vaccine. While things seem to be going well, negative news about side effects or production failure could put downside pressure on stocks. And as with any biotech company, there is ubiquitous possibility that clinical development failures cause a sell-off.
The reward is quite simple. Moderna has worldwide supply arrangements representing hundreds of millions of doses of its COVID-19 vaccine. What is less certain is whether it will succeed in developing the single-shot vaccine. With the current vaccine’s high efficiency rate and money being poured into single-dose development, it is hard to imagine this will fail.
As the black horse in the COVID-19 vaccine race, the market should know better than to downplay Moderna’s potential to commercialize more coronavirus solutions as the pandemic continues. Looking further, having greater financial resources and institutional support will increase your chances of success in other areas of disease and cancer.
Vendor companies have mixed views about Moderna, which is due to the uncertain nature of its business. But while ratings are ubiquitous, the analyst’s price targets are decided on the positive side. Among venture firms that make price predictions, all three have higher targets than current stock prices. The other eleven companies (including one with a sellable rating) have a target of between $ 140 and $ 208 with a north number of $ 200.
So, despite its success, Moderna still has many potential risks for investors. But given the potential for additional COVID-19 vaccine production and the development of COVID-free pipeline, at this level, the reserves are worth a try.