After a magnificent run, Moderna (MRNA) stock has recently lost some of its luster. Over the past month some notable of events have resulted in the shares shedding 30% of their value; weak earnings and outlook and Pfizer’s Covid pill have conspired to put the brakes on the extended rally.
So, where do things stand right now for the vaccine giant?
Oppenheimer’s Hartaj Singh recently met Moderna’s Investor Relations team to get the lowdown.
First off, the team addressed the supply chain issues which have led to the lowered FY21 revenue guidance; fill/finish problems, revenue recognition delays (COVAX), and putting low-and-middle income countries (LMICs) top of the priority list (LMICs equals low-price/low-volume) were noted as “key causes.”
The company also highlighted the shifting dynamics of the Covid-19 market, one that in the endemic phase will transform from “supply-constrained to demand-driven.” Although that mostly pertains to OECD countries which could reach the endemic phase by next year, while the ongoing pandemic in LMICs could see the need for primary vaccinations lasting until 2023.
Moderna’s Covid vaccine is also currently under priority review, with a PDUFA date anticipated around April next year. With a full license in tow, the company intends to focus on “product differentiation with Vaccine Efficacy (VE) based on real-world data.”
The talks also touched upon the likelihood of oral antivirals “eroding the COVID-19 vaccine market.” While the company sees Pfizer's and Merck's pills as “important product offerings,” Moderna does not consider them a threat, believing prevention is a “gold standard in infectious diseases.”
Finally, the company explained the reasoning behind its plans to eventually develop a pan-respiratory vaccine (COVID+Flu+RSV annual booster), highlighting its “convenience” for customers. “We view flu P1 data (e.g., HI titers, seroconversion, seroprotection, etc.) as an important catalyst that could validate the mRNA technology outside COVID-19,” said the 5-star analyst. Next year, the COVID+Flu (mRNA-1073) vaccine is anticipated to enter the clinic.
All in all, Singh reiterated a Neutral (i.e. Hold) rating on MRNA shares, without suggesting a fixed price target. (To watch Singh’s track record, click here)
The rest of the Street has reached the same conclusion; based on 6 Buys vs. 4 Holds and 3 Sells, the analyst consensus rates the stock a Hold. However, most appear to believe the shares are currently undervalued; going by the $310.27 average price target, the stock will provide returns of 32% over the one-year timeframe. (See Moderna stock analysis on TipRanks)
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