2020 is almost over and the world is still immersed in the deadly coronavirus pandemic. Globally, cases have passed the 64 million mark and there have been 1.48 million deaths from the virus worldwide. In the United States alone, 13.7 million cases have been reported as of December 2 and there have been at least 270,000 deaths. As the number of confirmed cases increases, pharmaceutical and biotech companies are working quickly to bring a safe and effective vaccine to market.
The two main players – Pfizer (NYSE: PFE) (with his partner, BioNTech (NASDAQ: BNTX)) and Modern (NASDAQ: ARNM) – announced the positive results of the interim trials of their vaccine candidates last month. Moderna’s results for its COVID-19 vaccine candidate, mRNA-1273, released on November 16, showed the potential vaccine to be 94.5% effective in protecting patients against COVID-19 infection.
So it is probably not surprising that its stock has increased 650% since the start of the year, as the S&P 500 only increased by 13%. MRNA-1273 has a few advantages over Pfizer’s potential vaccine. But what more can Moderna offer investors? We will take a look.
Moderna’s potential vaccine could make a difference for the company
The Moderna Phase 3 study, also known as the “COVE Study,” enrolled nearly 30,000 participants in the United States. This study is being conducted in collaboration with the National Institute of Allergy and Infectious Diseases (NIAID), which is part of the National Institutes of Health (NIH), the Biomedical Advanced Research and Development Authority (BARDA), and a few others.
In Moderna’s latest efficiency update, released on November 30, he reported that his candidate’s efficiency had dropped slightly to 94.1%. The results are still close to the 95% efficacy that Pfizer and BioNTech reported for their vaccine candidate on November 18. MRNA-1273 produced no serious side effects in addition to fatigue, and no inoculated patient developed severe cases of COVID. 19 among those confirmed during the study.
Beyond efficiency, storage and transport are also major concerns in the vaccine development process. There, it looks like Moderna has an advantage here. According to its recent announcements, its potential vaccine can be refrigerated for up to 30 days and stored at room temperature for up to 24 hours. In contrast, Pfizer’s potential vaccine must be stored at -94 degrees Fahrenheit to remain stable for more than five days. This will pose a challenge for Pfizer’s vaccine and may simply help mRNA-1273 gain a greater global market share.
The company announced its filing for emergency use authorization (EUA) with the United States Food and Drug Administration (FDA) on November 30. Moderna has also made agreements with various governments to provide the vaccine doses. It said it would be ready with 20 million doses for the United States by the end of 2020, and could manufacture 500 million to 1 billion doses worldwide by 2021. The company has a contract with the United States government to provide 100 million doses, with a government option to require an additional 500 million, if necessary. On November 25, Moderna announced that the The European Commission now has the ability to receive between 80 million and 160 million doses of mRNA-1273.
On November 29, Moderna noted an amendment in its agreement with the UK government to provide even more doses of mRNA-1273. The company also has other agreements with many small countries.
There are still a lot of risks involved that need to be clarified – for example, how long the protection against the potential vaccine will last and whether it will prove to be effective in children.
Moderna could be a savior if his vaccine candidate is successful. But he will need to continuously earn income from his COVID-19 vaccine to continue to increase his results and his stock price. This will only happen if vaccination is required every year. If any of the potential vaccines provide lasting immunity, demand for Moderna vaccine will eventually wane. Note that Moderna does not yet have any approved products in its range.
What could make it a millionaire stock?
The good news is that Moderna’s COVID-19 vaccine candidate is charting a formidable path for its future. If approved by the FDA, it could generate huge revenue over the next three to four years, providing a stable cash reserve for the business. Moderna can use this reserve to continue research and development of its products. At the moment, 21 clinical candidates are under development. Investors were interested in his other clinical trials for other treatments, including vaccines against cytomegalovirus, Zika virus and various types of cancer.
Another bright spot for Moderna is the mRNA technology that it uses not only for mRNA-1273 but also for many of its other potential treatments currently in clinical trials. Pfizer and BioNTech’s mRNA-based COVID-19 vaccine candidate, BNT162b2, uses the same technology. If Pfizer and BioNTech genetic technology also commercializes, it could generate a lot of attention and confidence in Moderna’s approach to drug development.
I still wouldn’t consider Moderna a millionaire maker stock until he had approved treatments in his wallet. That said, its potential COVID-19 vaccine could boost progress in its other clinical programs, increasing the chances of healthy gains for investors. Investors looking for long-term growth should seriously consider biotech stock. However, keeping in mind the risks associated with the industry (especially companies involved in the vaccine race), it would be wise to keep your investment allocation low.