Forget Moderna: this is a stronger coronavirus stock

Modern (NASDAQ: ARNM) could have a good chance of reporting positive news later this month from an advanced-stage study of mRNA-1273 of the coronavirus vaccine candidate. Pfizer and BioNTech announced great efficacy results for their experimental COVID-19 vaccine BNT162b2 earlier this week, and mRNA-1273 and BNT162b2 use a similar approach to messenger RNA (mRNA).

While Moderna might be on the cusp of having its moment in the spotlight, biotech stock isn’t exactly the ideal choice for many investors. After all, Moderna is still quite risky, with no product on the market yet. If you’re a more risk-reluctant investor looking for exposure to the COVID-19 vaccine race, you’ll probably want to look elsewhere. Forget Moderna – AstraZeneca (NASDAQ: AZN) is a much stronger coronavirus stock.

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Comparison of coronavirus programs

Moderna appears likely to obtain Emergency Use Authorization (EUA) for mRNA-1273 before AstraZeneca receives EUA for its own coronavirus vaccine, AZD1222. However, that probably won’t be a huge head start for Moderna. AstraZeneca plans to report year-end results for AZD1222 before the end of the year.

It is too early to know how AZD1222 and mRNA-1273 will stack up in terms of safety and efficacy. However, AstraZeneca could have at least a few advantages over Moderna.

First, AstraZeneca should have better manufacturing capacity than Moderna from the start. The big drugmaker has set up partnerships that it says will expand its global capacity to around 3 billion doses. In contrast, Moderna CEO Stephane Bancel said on the company’s second quarter August conference call that Moderna would be able to produce 500 million doses of mRNA-1273 in 2021 (although it noted that they were trying to get closer to a capacity of 1 billion doses). .

Second, AstraZeneca will not have some of Moderna’s logistical challenges; MRNA-1273 should be stored at extremely cold temperatures, while AZD1222 can be stored in a standard refrigerator. This could make AstraZeneca’s vaccine more attractive than Moderna’s, assuming the differences in safety and efficacy are minor.

A much bigger picture

There is a broader context for these two companies than their coronavirus programs. This overview is better for AstraZeneca than for Moderna.

AstraZeneca’s current product line is full of blockbusters. Several of them are seeing strong double-digit sales growth, including the cancer drugs Lynparza and Tagrisso, as well as the diabetes drug Farxiga. The company’s pipeline includes 172 programs, 24 of which are in the testing phase.

As mentioned earlier, Moderna has no approved products as of yet. The main candidate for biotechnology is mRNA-1273. Moderna’s pipeline includes more than a dozen clinical programs, but none (other than 1273 mRNA) is in advanced clinical study. One of the company’s Phase 2 applicants, an investigational therapy targeting coronary heart disease, is licensed by AstraZeneca.

There is no dispute between the two drug manufacturers regarding their financial situation. AstraZeneca is on track to generate more than $ 26 billion in revenue this year with more than $ 5 billion in profits. The company pays a dividend that pays close to 2.5%. Moderna’s revenue, most of which comes from external funding and partnerships, will likely be less than $ 500 million in 2020. The company will also undoubtedly show a significant net loss.

Simply stronger

Moderna could offer much more explosive growth than AstraZeneca if mRNA-1273 is successful. With this growth potential comes a much higher level of risk as well.

Meanwhile, AstraZeneca’s growth prospects look attractive even if they are not as good as Moderna’s. Wall Street analysts predict the company will grow profits by 19% per year on average over the next five years. While AstraZeneca faces some risks, especially pipeline risks common to all drugmakers, the reality is that it is simply in a stronger position than Moderna. The multinational should appeal to less aggressive investors.