BRAZIL – 2020/03/24: In this photo illustration a Moderna logo seen displayed on a smartphone. … [+]
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[8/28/2020] Positive Data From Older Adults, E.U Supply Deal
Moderna (NASDAQ: MRNA), a frontrunner in the development of a Covid-19 vaccine, saw its stock rally by close to 10% over the last two days. Below we provide a quick update on some of the recent developments for the company.
Based on interim data from its Phase 1 clinical trial, Moderna indicated that the immune response provided by its vaccine candidate in older people (56 to 70 years) was similar to the response produced in younger participants (18 to 55 years). This is a positive development, considering that the novel Coronavirus is typically more severe in older patients. This also eases past concerns that a vaccine might not offer as much protection to older people due to their inherently weaker immune systems.
Earlier this week, Moderna said that it intends to supply 80 million doses of its experimental coronavirus vaccine to the European Union, with an option for the Member States to purchase an additional 80 million doses for a total of up to 160 million doses. There has been a lot of deal-making activity between vaccine developers and governments in recent weeks. To recall, earlier this month, Moderna agreed to provide 100 million doses of the vaccine to the U.S. government for about $1.5 billion.
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[8/19/2020] Why Moderna Stock Is Trending Lower
Moderna, a front runner in the race for a Covid-19 vaccine, has seen its stock drop by about 30% over the last month, falling from close to $95 per share on July 17 to about $67 currently. So what’s driving the sell-off? We think it comes down to two factors.
Firstly, it looks like Covid-19 vaccines won’t nearly be as lucrative as investors initially estimated. Moderna will price its vaccine at an average of $15 per dose or about $30 for a course of two doses per a recent deal with the U.S. government. While prices are likely to be higher for smaller volume purchases, the general trend in vaccine pricing hasn’t been too encouraging for investors. Based on announcements so far, various vaccine courses have been priced ranging from $20 to $42 per person in the U.S. Given the high development costs (which were partly government-funded) it’s unlikely that Moderna’s Covid-19 vaccine will be a major moneymaker.
For perspective, we estimate that Moderna’s Covid-19 vaccine will add less than $5 each year to Moderna’s EPS over 2021 and 2022
Secondly, competition for a vaccine is also mounting. Although Moderna had an early lead in the clinical timeline, starting human trials ahead of others, the company is now one of seven players carrying out phase 3 trials, which test the efficacy of a vaccine on a large scale. Other notable players with candidates in phase 3 include Oxford-AstraZeneca and Pfizer-BioNTech.  There are also about 15 candidates in phase 2 trials. A larger number of successful candidates could reduce the volume potential for Moderna’s vaccine.
[8/10/2020] What Will Moderna Look Like Post Covid-19?
Moderna’s stock has rallied almost 4x since the beginning of this year, rising from levels of about $20 to near $75 currently. However, we believe the vaccine, if successful, is only likely to contribute meaningfully to Moderna’s earnings for about two years, after which the rest of the company’s pipeline will be crucial to driving growth. Below, we take a brief look at how Moderna’s business could shape up post the Covid-19 pandemic.
Covid Vaccine Earnings May Be Limited, But It’s Key To Validating Moderna’s Technology At Scale
Covid-19 has become a healthcare and economic crisis that is costing the global economy trillions of dollars and there is an urgent need to develop a vaccine to help end the pandemic. Although Moderna is seen as one of the leaders in the vaccine race, there’s a lot of competition, and going by the recent progress, it’s reasonable to expect that there will be multiple successful candidates by 2021. This means that sales for Moderna’s vaccine could top-off by as early as 2022, once a large percentage of the global population is vaccinated. For perspective, we estimate that Moderna’s Covid-19 vaccine will add less than $5 each year to Moderna’s EPS over 2021 and 2022, after which its contribution is likely to be limited, assuming that it doesn’t require multiple future doses. However, the vaccine is still crucial to validating Moderna’s technology.
While the messenger RNA (mRNA) based platform that Moderna uses for its drug development could be more potent and easier to produce compared to traditional vaccines, it has never been used commercially to date.  Now Moderna’s rapid progress with its Covid vaccine, coupled with some positive data on efficacy is making investors more positive about the prospects of mRNA technology. The validation of the technology effectively reduces the risk surrounding the rest of Moderna’s sizable pipeline which is focused mostly on vaccines and rare diseases.
A Quick Look At Moderna’s Pipeline
The company has 22 programs underway, 12 of which are in the clinical stage. Moderna’s Cytomegalovirus vaccine, which is currently in phase 2 studies and could move to phase 3 in 2021 is likely to be the company’s first candidate for approval after its Covid-19 vaccine. Moderna has projected annual peak sales in the range of $2 to $5 billion if approved. Moderna’s Personalized cancer vaccine, which is also currently in phase 2 trials could also be a driver of revenue in the next few years if it’s approved and adopted widely. The company is working with Merck on this project and has also been studying the use of the vaccine along with Merck’s blockbuster cancer drug KEYTRUDA for the treatment of high-risk adjuvant melanoma. The company is also working on therapeutics for Myocardial ischemia, commonly known as coronary heart disease. While the drug is in phase 2 trials and has been licensed to AstraZeneca, Moderna should stand to generate meaningful revenues from royalties if the drug is successful considering that the U.S. alone sees roughly 1.5 million cases of this disease each year. 
Larger pharma companies could offer better downside protection compared to Moderna if you’re looking to gain exposure to a Covid-19 vaccine stock. Should you pick Johnson & Johnson Or Pfizer For Better Returns?
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