The coronavirus pandemic has significantly favored the fortunes of Moderna MRNA. It had no commercialized product in its portfolio till 2019 and its market capitalization stood at $6.6 billion. Key pipeline candidates were in mid-stage development. However, the COVID-19 pandemic completely turned the table. With the success of its mRNA-based vaccine for COVID-19, mRNA-1273, Moderna is now competing with many deep-pocketed and legacy pharma companies.
Moderna’s market capitalization almost touched $200 billion in August 2021. Although it has declined since then, it is still significantly high. The company’s shares have increased by leaps and bound since the end of 2019 and gained almost 24-fold since Dec 31, 2019. The company has already eclipsed two large pharma players, Sanofi SNY and Bayer, in terms of market capitalization with only one commercialized product.
Moderna’s Brief History
The company had ended 2019 with 12 pipeline candidates in clinical-stage development with only its cytomegalovirus vaccine candidate in mid-stage development and no late-stage candidate. The company relied on strategic collaborators and government-sponsored and private organizations for revenues. The company had recorded revenues of $60.2 million, $135.2 million and $205.8 million in 2019, 2018 and 2017 respectively. The company’s operating expenses, especially to support the development of its diverse pipeline candidate, far exceeded revenues. Although the company ended 2019 with $1.26 billion in cash resources, the significantly high expenses would have eroded the resources in a few years without any reinforcements. We note that the development of pipeline candidates can often stretch over a decade or more and hence it could have become difficult for Moderna to carry out its operations. It might have had to lean on debts to continue.
Things changed for Moderna in a few months in 2020 as it started the development of mRNA-1273 and received significant funding from U.S. government agencies. The company received emergency use authorization (“EUA”) for the COVID-19 vaccine in December last year in the United States, followed by similar regulatory authorization in several countries. The company had $12.2 billion in cash resources as of Jun 30, 2021. It expects to generate revenues of almost $20 billion in 2021 courtesy of the robust success of its COVID-19 vaccine. The vaccine has provided the company an advantage by inflating its cash resources, which it can use to develop other pipeline candidates. Moreover, its coronavirus vaccine is likely to generate significant revenues over at least the next year, which will help the company to become more self-sufficient. The company has also progressed with other pipeline candidates, with one slated to enter the pivotal stage of development soon.
mRNA-1273 Development Timeline
Moderna was able to start the development of mRNA-1273 soon after the genome sequence of the original coronavirus was available in early 2020. The candidate was added to the U.S. government’s accelerated COVID-19 development program, Operation Warp Speed, and the company was able to progress through late-stage development by November 2020. Interim data from the phase III COVE study demonstrated 94.5% vaccine efficacy in adults. Data from the final analysis demonstrated an efficacy of 93% after six months of the initial two-dose regimen. The vaccine also achieved greater than 98% efficacy against severe cases of COVID-19 and 100% efficacy against death caused by COVID-19. The company’s COVID-19 vaccine successfully met the primary endpoint of efficacy in the phase II/III TeenCOVE study evaluating it in adolescents.
While in the United States, Moderna is seeking authorization for use of its vaccine in adolescents, the same is authorized for adults and adolescents in Europe. The company is also developing the vaccine for children. Currently, Moderna is seeking “full” approval for its COVID-19 vaccine, mRNA-1273, in the United States. A third or booster dose of the vaccine is already authorized for immunocompromised individuals in the United States. Moderna along with its key rivals in the COVID-19 vaccine space, Pfizer PFE and BioNTech BNTX, is focused on getting authorization/approval for the third dose for all adults.
Moderna is also developing variant-specific booster candidates.
Other Promising Pipeline Candidates
Modena currently has 22 clinical-stage candidates in its pipeline targeting different diseases. Several other candidates are in pre-clinical stage. Successful development will also diversify its commercial portfolio, which consists of one product — its COVID-19 vaccine.
The leading pipeline candidate, mRNA-1647, is being developed as a cytomegalovirus vaccine. The company has completed a phase II study and a late-stage is expected to start soon. The company has two other vaccine candidates — a flu vaccine and a respiratory syncytial virus (“RSV”) vaccine — which may enter late-stage development in the upcoming months. The company is also developing vaccines for Zika virus, HIV and cancer among others as well as a few therapeutics candidates. These candidates are currently in early or mid-stage development.
Moderna’s shares have declined over the past few days due to some negative news on vaccines and the anticipated rise in competition.
However, with the booster dose likely to get an authorization, possibly in the next few weeks, we expect the company to recover its share price loss and move higher in 2022 amid high demand for the vaccine and probably for the booster doses. The company has several advance purchase agreements with different countries worth several billions of dollars in place for 2022. Moreover, positive pipeline updates will also drive the share price.
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