Moderna (NASDAQ: MRNA) brought in billions of dollars from its coronavirus vaccine last year. And we can expect the same this year. In fact, it's is on track to report even higher revenue in 2022. Advance purchase agreements for its vaccine total $19 billion so far, compared to vaccine sales of $18.5 billion in 2021 -- when it booked billions in profits, too.
All of that sounds great. But what worries investors is the question of what comes next. After all, the coronavirus remains a global pandemic now. But experts say it may switch to being an endemic situation as early as this year, at least in some countries. It's logical to imagine demand for COVID-19 vaccines declining somewhat in such a situation. The question is whether investors should expect lower revenues from Moderna -- or if the company's next step could be worth billions.
Image source: Getty Images.
Vaccine revenue may remain high
Here's one important point to start us off. There's still plenty of reason to expect that Moderna's COVID-19 vaccine sales will remain significant for quite some time. The virus will continue to circulate widely in an endemic situation, so demand probably won't drop off a cliff.
Another detail to consider has to do with pricing. Moderna now sells its vaccine to governments. But eventually, the company will move toward selling doses in the private market -- directly to pharmacies and healthcare providers. And at that point, Moderna expects to raise the price of its vaccine. We can't yet predict revenue beyond this year. But those elements combine to support the idea of lasting, blockbuster-level revenue from initial vaccine doses and boosters.
Now let's move on to Moderna's next step. There are several parts to it. But one key element is that by 2025, the company aims to bring new vaccine candidates against 15 pathogens considered public health risks into clinical trials. COVID-19 is one of them, but Moderna also names HIV, malaria, tuberculosis, and Zika, among others.
Moderna already has begun clinical programs for some of these. For instance, the company recently moved an HIV candidate into phase 1 and is studying a Zika candidate in phase 2.
Preparing for "Disease X"
At the same time, Moderna is preparing for what the World Health Organization calls "Disease X." This refers to the next pathogen that could cause an epidemic or pandemic. Moderna is using a prototype vaccine method for this research. This means it already has designed the base vaccine -- but can quickly adapt it to new pathogens as necessary. This approach helped Moderna take its coronavirus vaccine from the drawing board to market in 11 months. At that time, Moderna used its earlier research into severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS) to quickly advance its COVID-19 program.
In the future, we might expect work on a pandemic vaccine candidate to move forward even more quickly. That's due both to the experience Moderna gained in developing its COVID-19 vaccine and the proactive steps it's taking now.
The strategy ahead
Moderna's strategy includes various interesting elements -- like setting up subscription programs with countries for vaccine doses. But let's focus on those 15 candidates it intends to have in human trials by 2025 and its prototype vaccine method. Both of these could be worth billions of dollars for Moderna over the long term.
The company aims to address pathogens that are or could be devastating for countries. Success with even a few of these vaccines could bring in blockbuster revenue because the need for such products is high. An HIV vaccine, for example, could be a game-changer. So far, no such product exists, but the global HIV vaccine market could be worth as much as $2.5 billion by 2027, according to 360iResearch.
And Moderna's prototype vaccine approach means successes for its programs could come sooner rather than later. Streamlining the research and development process is key to effectively tackling newly identified infectious diseases that rapidly rush through populations -- like COVID-19. This effort could make Moderna the "go to" company when it comes to dealing with outbreaks, epidemics, and pandemics.
All of this means Moderna has multiple opportunities to generate significant revenue. That, combined with the company's current strength in the coronavirus vaccine market, should keep it bringing in billions of dollars in sales annually down the road. And if Moderna's revenue story is just getting started, that's likely to translate into long-term share price performance.
10 stocks we like better than Moderna Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Moderna Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of March 3, 2022
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
