Why Moderna stock fell 32% in December

What happened

Biotechnology stocks Modern (NASDAQ: ARNM), maker of a COVID-19 vaccine, fell 31.6% in December, according to data from S&P Global Market Intelligence.

For the context, the S&P 500 returned 3.8% last month.

So what

We can attribute the 32% drop in Moderna stock last month to profit taking. After all, stocks rose 581% in 2020 through the end of November, so it’s no surprise that some investors pulled money off the table in December. Moderna shares ended the year with a gain of 434%.

Moderna’s shares began their long rise in early 2020 when the company announced it was developing a vaccine to immunize against COVID-19, the disease caused by the novel coronavirus.

As the chart below shows, the stock rose sharply in November. It soared 126% in that month, due to a string of good news about mRNA-1273, which was then a candidate vaccine based on messenger RNA. On November 30, Moderna announced positive final results from its Phase 3 study. As I wrote previously, “it has found its vaccine candidate to be 94.1% effective in preventing COVID-19, and it did not reveal any serious security concerns. Additionally, the company said it has submitted an application to the United States Food and Drug Administration (FDA) for Emergency Use Authorization (EUA) for mRNA-1273. ”

Then on December 18 came the “big news”: Moderna announced that the FDA had cleared the emergency use of mRNA-1273. The shares, which had been falling throughout December, fell almost 3% that day. The reason stocks fell on such great news is that this news was widely expected and already factored in in November.

Distribution of the vaccine in the United States began the following day, and administration of the first two-dose vaccine began on December 20.

Data by YCharts.

Now what

On December 18, Moderna said it plans to deliver approximately 20 million doses to the US government by the end of December 2020. It also expects to have between 100 million and 125 million doses available worldwide at first. quarter 2021, including 85 to 100 million of those available in the United States. A total of 200 million doses have been ordered by the US government, which has the option to purchase up to 300 million additional doses.

The rollout of Moderna’s vaccine to the states was slower than expected in December, but that’s not its fault. The federal government’s Operation Warp Speed ​​is responsible for distribution.