$ 100 billion market cap is blue sky scenario for Moderna: analyst

Biotech and pharmaceutical company Moderna, a pioneer in the development of coronavirus vaccines, has the potential to reach a market capitalization of more than $ 100 billion, according to an analyst.

Asked what the blue sky scenario might be for Moderna, whose coronavirus vaccine has been shown to be 94% effective in preventing serious Covid infection, and who is already working on a booster to combat the variant that has First emerging in South Africa, Hartaj Singh, managing director and senior biotech analyst at Oppenheimer, told CNBC on Thursday that sales trajectories of similar companies show what Moderna may experience in the future.

“What we’re doing is directing people to other companies in the biotech industry that peaked or reached valuation when they launched their first set of products. Companies as diverse as Alexion, Regeneron, and Vertex, right now, and they’ve essentially peaked at about ten times future sales, with future sales three to five years. “

“I think with Moderna’s coronavirus vaccine franchise, and they’re also starting to develop influenza vaccines that should hit the market within the next couple of years … you know, we might see a franchise of $ 10 billion in five to seven years. If you put a multiple of ten times the sales on it, you can do the math, then it’s a company with a market cap of over $ 100 billion, ”he told“ Street Signs Europe ” from CNBC. Its market value is currently just over $ 57 billion.

Moderna shares rose 3% in pre-market trading on Thursday as its fourth quarter revenue, of $ 571 million, far exceeded estimates of $ 318.9 million, and compared to $ 14 million. dollars for the fourth quarter of 2019.

It also forecasts $ 18.4 billion in Covid-19 vaccine sales in 2021, after generating $ 199.87 million in Covid-19 vaccine sales in the fourth quarter. The company, however, reported a quarterly loss of 69 cents, more than the 35-cent loss analysts expected.

In the results report, CEO Stéphane Bancel said 2020 was a historic year for Moderna and 2021 would be a “year of inflection” for the company.

“We previously believed that mRNA would lead to approved drugs, and we were limited in our ambitions by the need to regularly raise capital and maintain several years of liquidity to manage funding risk.” We now know that mRNA vaccines can be very effective and licensed for use, and we are a commercial cash flow company, ”he said.

“We plan to accelerate and significantly increase our investments in science and expand our development pipeline more quickly. By delivering on our 2021 priorities, we will advance our mission of delivering on the promise of mRNA science to create a new generation of transformative drugs for patients. This is just the start, ”he said.

The drugmaker announced on Wednesday that it is set to begin trials of its new Covid-19 vaccine booster vaccine, designed to provide better protection against a new variant of the virus first discovered in South Africa. South. The biotech company said it had shipped doses of the vaccine to the U.S. National Institute of Health for testing.

Moderna’s current two-dose vaccine elicits a weaker immune response against the South African strain of the virus, believed to be more infectious than other variants, although the company said antibodies in patients remain above levels that should be protective against the virus.

“Moderna is committed to making as many updates to our vaccine as necessary until the pandemic is under control,” Bancel said in a press release. “We hope to demonstrate that booster doses, if needed, can be given at lower dose levels, which will allow us to deliver many more doses to the global community at the end of 2021 and 2022 if needed.”

Separately, the company also announced on Wednesday that it plans to produce up to 700 million doses in 2021 and 1.4 billion doses of the Covid-19 vaccine in 2022, assuming the vaccine will be administered to its current level of 100 micrograms.

If the vaccine proves effective at a lower dosage level, the company said it could deliver up to 2.8 billion doses by 2022. Moderna has reached an agreement with the US government to deliver 300 million doses .

Disclaimer: Hartaj Singh does not own any stake in Moderna shares.

– CNBC’s Berkeley Lovelace contributed reporting for this story.