Why Moderna Stock Surged Today
What happened
Shares of Moderna (NASDAQ: MRNA) jumped 8.6% on Monday after the biotechnology leader said it dosed the first participant in a new clinical trial for its experimental vaccine for human immunodeficiency virus (HIV).
So what
The phase 1 study is designed to evaluate the vaccine's safety profile and ability to provoke an immune response in approximately 100 adults aged 18 to 55 years who are HIV negative. The National Institutes of Health (NIH) is helping to fund the trial.
Image source: Getty Images.
HIV is the virus that causes acquired immunodeficiency syndrome (AIDS), which currently has no cure. There are roughly 38 million people who have HIV across the world.
"Developing a vaccine regimen that induces sustained protective levels of HIV neutralizing antibodies in humans has been difficult to achieve," Moderna president Stephen Hoge said in a press release." At Moderna, we believe that mRNA offers an opportunity to take a fresh approach to this challenge."
Now what
Investors have grappled with how to value Moderna's stock. Although the biotech's COVID-19 vaccine has been a boon for the company, analysts question whether booster shots will represent a sustained source of recurring revenue in the coming years. If not, Moderna's profits could plunge once coronavirus vaccination programs have run their course.
Moderna is reinvesting a large portion of the cash it earned from its COVID-19 drug into its research and development program. An HIV vaccine could become an important new revenue stream should it prove safe and effective. But even if it doesn't, Moderna has a host of other drugs targeting other diseases in development.
And with its stock price down sharply from its highs even after today's gains, investors arguably aren't paying much for the potential upside of Moderna's pipeline.
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
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.
