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Moderna (MRNA) Stock Rises 22% YTD: Time to Buy the Stock?
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Moderna (MRNA - Free Report) has risen 22.1% in the year-to-date period against the industry’s 2.7% fall, as seen in the chart below. The stock also outperformed the sector and the S&P 500. Shares of the company are currently trading above its 200-day moving average.
MRNA Stock Outperforms Industry, Sector & S&P 500
Image Source: Zacks Investment Research
Despite registering a significant fall in top-line due to lower COVID-19 vaccine sales, Moderna’s shares continue to soar this year on the back of the strong development of its mRNA-based therapeutics. This progress positions the company for multiple product launches over the next few years.
Encouraging Upcoming Launches
MRNA plans to launch 15 new marketed products, including four in rare disease indications, over the next five years. With these potential launches, management aims to boost its revenues and reduce dependence on the COVID-19 vaccine, which has been experiencing a significant decline due to lower vaccinations with the end of the pandemic.
The FDA approval of mRNA-based RSV vaccine mResvia was an important milestone for Moderna as it marks the first product approval outside of the COVID-19 vaccine space. Management expects to commercially launch this RSV vaccine in the country during the 2024-2025 respiratory virus season, which usually starts in the late fall. Regulatory filings are also under review, seeking marketing approval for mResvia in Europe and Australia. Management is also working on expanding the use of the vaccine in pediatric populations.
This puts the company in direct competition with RSV vaccines Arexvy and Abrysvo, which are marketed by pharma giants GSK plc (GSK - Free Report) and Pfizer (PFE - Free Report) , respectively. Both GSK and Pfizer vaccines received approvals last year.
Given the company’s timetable, we expect the influenza vaccine to be its third product launch, with a regulatory filing expected before 2024-end and a potential launch planned in the second half of 2025. Management is also developing a COVID-19/influenza vaccine, with a possible launch also targeted in 2025.
Rapid Pipeline Progress
The company is also progressing well with the development of its pipeline candidates. Management is currently evaluating multiple candidates — including CMV, influenza, individualized neoantigen therapy (INT), and a COVID/flu combination vaccine — in late-stage studies.
An important candidate that has been garnering investor attention is mRNA-4157, an investigational INT that is being developed in collaboration with Merck (MRK - Free Report) . Moderna/Merck are evaluating mRNA-4157 in two pivotal phase III studies for melanoma and non-small cell lung cancer (NSCLC) indications. Since the onset of this year, Moderna/Merck initiated three new clinical studies evaluating mRNA-4157 across cutaneous squamous cell carcinoma (CSCC), renal cell carcinoma and muscle-invasive bladder cancer indications.
In March, management announced its decision to advance three new vaccines to pivotal late-stage development, namely mRNA-1189 (for Epstein-Barr virus [EBV]), mRNA-1468 (for Varicella-Zoster virus [VZV]) and mRNA-1405 (for norovirus).
Unlike traditional vaccines which can take months to produce, mRNA-based vaccines can be developed quickly and also offer manufacturing scalability, something that was observed in the case of COVID-19 vaccines. Because of this major advantage, Moderna received a project award of $176 million from the U.S. government to accelerate the development of an mRNA-based vaccine program aimed at preventing the spread of the H5N1 virus, also known as bird flu, in humans.
Strong Cash Position
During the pandemic, Moderna gave the world one of the first and most widely used COVID-19 vaccines. These sales turned Moderna from a loss-making, clinical-stage company to one of the most profitable commercial-stage biotech companies in the healthcare sector.
The profits generated from the sale of its COVID products in 2021 and 2022 strengthened the company’s cash position, which is used to make acquisitions, buy back shares and reduce debt. As of March 2024-end, Moderna has cash, cash equivalents and marketable securities totaling approximately $12.2 billion.
This cash boost also allowed Moderna to increase investments in R&D and SG&A to support its pipeline development. Overall, the profits and cash from COVID-19 vaccine sales have allowed Moderna to invest in support of its growth plans over the next few years.
Attractive Valuation & Improving Estimates
From a valuation standpoint, Moderna appears attractive relative to the industry. Going by the price/book (P/B) ratio, the company’s shares currently trade at 3.63, trailing 12-month book value, lower than 4.62 for the industry.
Image Source: Zacks Investment Research
Estimates for Moderna’s 2024 loss per share have slightly improved from $7.50 to $7.46 in the past 60 days.During the same period, estimates for 2025 have improved from a loss of $5.33 to $5.29.
Image Source: Zacks Investment Research
Conclusion
Moderna’s upcoming product launches will help the company diversify its revenue stream, which is currently dependent on only one product. Investors should also look out for updates on the company’s pipeline candidates, which could also be catalysts for the stock. Data from a late-stage study evaluating Moderna’s CMV vaccine is expected by the end of this year.
Moderna is an outstanding stock to have in one’s portfolio based on its strong cash balance and robust pipeline progress. As the stock currently trades at a discount to the industry, we recommend investors should accumulate this #2 Ranked stock as it has growth potential. Consistently rising earnings estimates highlight analysts’ optimistic outlook for further growth.
Image: Bigstock
Moderna (MRNA) Stock Rises 22% YTD: Time to Buy the Stock?
Moderna (MRNA - Free Report) has risen 22.1% in the year-to-date period against the industry’s 2.7% fall, as seen in the chart below. The stock also outperformed the sector and the S&P 500. Shares of the company are currently trading above its 200-day moving average.
MRNA Stock Outperforms Industry, Sector & S&P 500
Despite registering a significant fall in top-line due to lower COVID-19 vaccine sales, Moderna’s shares continue to soar this year on the back of the strong development of its mRNA-based therapeutics. This progress positions the company for multiple product launches over the next few years.
Encouraging Upcoming Launches
MRNA plans to launch 15 new marketed products, including four in rare disease indications, over the next five years. With these potential launches, management aims to boost its revenues and reduce dependence on the COVID-19 vaccine, which has been experiencing a significant decline due to lower vaccinations with the end of the pandemic.
The FDA approval of mRNA-based RSV vaccine mResvia was an important milestone for Moderna as it marks the first product approval outside of the COVID-19 vaccine space. Management expects to commercially launch this RSV vaccine in the country during the 2024-2025 respiratory virus season, which usually starts in the late fall. Regulatory filings are also under review, seeking marketing approval for mResvia in Europe and Australia. Management is also working on expanding the use of the vaccine in pediatric populations.
This puts the company in direct competition with RSV vaccines Arexvy and Abrysvo, which are marketed by pharma giants GSK plc (GSK - Free Report) and Pfizer (PFE - Free Report) , respectively. Both GSK and Pfizer vaccines received approvals last year.
Given the company’s timetable, we expect the influenza vaccine to be its third product launch, with a regulatory filing expected before 2024-end and a potential launch planned in the second half of 2025. Management is also developing a COVID-19/influenza vaccine, with a possible launch also targeted in 2025.
Rapid Pipeline Progress
The company is also progressing well with the development of its pipeline candidates. Management is currently evaluating multiple candidates — including CMV, influenza, individualized neoantigen therapy (INT), and a COVID/flu combination vaccine — in late-stage studies.
An important candidate that has been garnering investor attention is mRNA-4157, an investigational INT that is being developed in collaboration with Merck (MRK - Free Report) . Moderna/Merck are evaluating mRNA-4157 in two pivotal phase III studies for melanoma and non-small cell lung cancer (NSCLC) indications. Since the onset of this year, Moderna/Merck initiated three new clinical studies evaluating mRNA-4157 across cutaneous squamous cell carcinoma (CSCC), renal cell carcinoma and muscle-invasive bladder cancer indications.
In March, management announced its decision to advance three new vaccines to pivotal late-stage development, namely mRNA-1189 (for Epstein-Barr virus [EBV]), mRNA-1468 (for Varicella-Zoster virus [VZV]) and mRNA-1405 (for norovirus).
Unlike traditional vaccines which can take months to produce, mRNA-based vaccines can be developed quickly and also offer manufacturing scalability, something that was observed in the case of COVID-19 vaccines. Because of this major advantage, Moderna received a project award of $176 million from the U.S. government to accelerate the development of an mRNA-based vaccine program aimed at preventing the spread of the H5N1 virus, also known as bird flu, in humans.
Strong Cash Position
During the pandemic, Moderna gave the world one of the first and most widely used COVID-19 vaccines. These sales turned Moderna from a loss-making, clinical-stage company to one of the most profitable commercial-stage biotech companies in the healthcare sector.
The profits generated from the sale of its COVID products in 2021 and 2022 strengthened the company’s cash position, which is used to make acquisitions, buy back shares and reduce debt. As of March 2024-end, Moderna has cash, cash equivalents and marketable securities totaling approximately $12.2 billion.
This cash boost also allowed Moderna to increase investments in R&D and SG&A to support its pipeline development. Overall, the profits and cash from COVID-19 vaccine sales have allowed Moderna to invest in support of its growth plans over the next few years.
Attractive Valuation & Improving Estimates
From a valuation standpoint, Moderna appears attractive relative to the industry. Going by the price/book (P/B) ratio, the company’s shares currently trade at 3.63, trailing 12-month book value, lower than 4.62 for the industry.
Image Source: Zacks Investment Research
Estimates for Moderna’s 2024 loss per share have slightly improved from $7.50 to $7.46 in the past 60 days.During the same period, estimates for 2025 have improved from a loss of $5.33 to $5.29.
Image Source: Zacks Investment Research
Conclusion
Moderna’s upcoming product launches will help the company diversify its revenue stream, which is currently dependent on only one product. Investors should also look out for updates on the company’s pipeline candidates, which could also be catalysts for the stock. Data from a late-stage study evaluating Moderna’s CMV vaccine is expected by the end of this year.
Moderna is an outstanding stock to have in one’s portfolio based on its strong cash balance and robust pipeline progress. As the stock currently trades at a discount to the industry, we recommend investors should accumulate this #2 Ranked stock as it has growth potential. Consistently rising earnings estimates highlight analysts’ optimistic outlook for further growth.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.