Why Moderna Stock is slipping again today

What happened

Actions of Modern (NASDAQ: mRNA) are down 5.9% as of 11:49 a.m. EDT Monday. This drop appears to be a continuation of the steep drop that began last week after Merck (NYSE: MRK) and Ridgeback Biotherapeutics announced positive results from an advanced stage study on the COVID-19 pill molnupiravir.

So what

Other vaccine stocks also continue to decline in response to the good news from Merck. However, this appears to be an overreaction. The availability of safe and effective oral treatment for COVID-19 is unlikely to prompt the United States or other countries to focus on vaccinations.

In its second quarter update in August, Moderna announced purchase agreements for its approximately $ 12 billion COVID-19 vaccine for delivery in 2022. In addition, those agreements included options for $ 8 billion. extra dollars.

Since then, the company has entered into another supply agreement with Canada to deliver 20 million doses per year in 2022 and 2023. Canada also has options to purchase an additional 15 million doses per year and up to 35 million. doses in 2024. Moderna recently signed an agreement. with Peru also to provide 20 million doses next year.

Merck’s positive results are unlikely to change Moderna’s vaccine sales for the next two years. However, it’s appropriate for investors to take a close look at the stock’s valuation in light of the uncertainty surrounding ongoing COVID-19 vaccine sales after the pandemic ends.

Now what

The next big thing to watch out for with Moderna is the upcoming review by the Food and Drug Administration and the Centers for Disease Control & Prevention of the boosters for the company’s COVID-19 vaccine. Data is also expected to be published in the near future on the use of Moderna’s vaccine in mix-and-match studies with other vaccines.