A complete guide to Moderna stock
Oliver Brett May 6, 2021 10:53 AM
Moderna has risen rapidly through the ranks of “big pharma” companies after winning multiple contracts to produce Covid-19 vaccines for large sections of the world’s populations. But is it profitable and what scope does it have for growth? Read our guide for the full lowdown.
What does Moderna do?
Moderna is a pharmaceutical and biotechnology company based in the United States with headquarters in Cambridge, Massachusetts, the city where the world-renowned Harvard University is situated. Moderna focuses on drug discovery, drug development, and vaccine technologies and was founded in 2010.
It was initially set up to develop, and ultimately commercialise the ground-breaking research work of stem cell biologist Derrick Rossi. In November 2020, Moderna announced it had developed a Covid-19 vaccine that had shown initial evidence of a 94% success rate in preventing the deadly virus. The vaccine has since been approved for use across multiple jurisdictions worldwide.
Why are investors interested in Moderna stock?Moderna (NASDAQ:MRNA) has been a closely watched stock since its Covid-19 vaccine won widespread approval to be used in the fight to combat the coronavirus pandemic.
Many pharmaceutical companies proved popular “safe haven” stock options during 2020. For instance, Moderna’s price had already trebled in price between January and October 2020 before spiking again with news of the imminent Covid-19 vaccine rollout. Its price has since proved volatile as investors ponder the company’s long-term value.
Some investors may feel it is a stock that is in danger of becoming over-bought, but others are keen to look beyond the pandemic. Moderna is advantageously placed to further develop its highly innovative biotech in which cells are “directed” to make proteins that work as drugs and vaccines. Because of this, and the fact it is working on developing new vaccines to combat many other diseases, it has been described as a potential takeover target.
How does Moderna make money?
The European Union initially bought 310 million shots of Moderna’s Covid vaccine, and has an option for a further 150 million in 2022. The US government has ordered 300m shots. Japan, the United Kingdom and others are also ordering large quantities of vaccine. Moderna charges an average of $33 for a pair of shots.
Moderna has said it expects 2021 sales of $18.4 billion. Barclays analyst Gena Wang forecasts sales $12.2bn in 2022, and $11.4bn in 2023, assuming recurring vaccination requirements. And all this is before you consider Moderna’s scope to unearth new drugs and vaccines to combat other diseases.
What is Moderna's business strategy?
Moderna was initially focused on research, advancing programs in what was then the unproven field of messenger RNA (mRNA). It has risen to rapid prominence in a sector dominated by much more established enterprises by focusing purely on mRNA medicines, in which it is “developing a new class of drug that hacks the very operating system of life,” according to a Forbes editorial in 2016.
But remarkably, Moderna did not have a single product on the market when getting approval for its Covid vaccine. That small matter notwithstanding, it has proved adept at managing a diverse clinical portfolio of vaccines and therapeutics while managing a relatively small team of staff.
In addition, it has developed a broad intellectual property portfolio in areas including mRNA and lipid nanoparticle formulation, plus an integrated manufacturing plant that allows for both clinical and commercial production at scale and at what it claims is “unprecedented” speed.
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Is Moderna profitable?
Unsurprisingly, 2021 is projected to be a breakthrough year for Moderna, which has never previously posted a profit.
As per a February 25 update from the firm, it expects to collect $18.4bn (£13bn) of sales from its coronavirus vaccine before the end of the calendar year. That’s more than one of its chief rivals, Pfizer, expects to earn. Pending further negotiations with governments and other distributors, that figure could even be at the conservative end of forecasts.
These vast sales will almost certainly push Moderna into profit for the first time and move the company into the big league in its sector. The UK’s AstraZeneca had sales of $25bn last year. But while AZ employs 70,000 staff, Moderna had just 830 in 2019.
How much is Moderna worth?
Judged on its share price as of May 5, 2021, Moderna has a market cap in excess of $69 billion. But what about the future?
Oppenheimer analyst Hartaj Singh thinks Moderna could hit a market cap of $100 billion before the end of the decade. In an interview with CNBC, he said: "I think with Moderna's coronavirus vaccine franchise, and they're also starting to develop flu vaccines which should hit the market in the next couple of years… you know, we could see a $10 billion franchise five to seven years from now. If you put a 10-times-sales multiple on that then, you can do the math, then it's a $100-billion-plus market cap company.”
Who owns Moderna?
Robert S. Langer owns a total of 11.5 million Moderna shares, representing 2.9% of the company's total shares outstanding. Langer serves on the board of directors. He is the David H. Koch Institute Professor at the Massachusetts Institute of Technology (MIT).
Stéphane Bancel, the chief executive officer, and Noubar B. Afeyan, one of the company's co-founders and is chair of the board, are the next two biggest individual shareholders. The biggest institutional shareholder is global investment management firm Baillie Gifford.
Moderna: Its board of directors
- Noubar Afeyan, Ph.D., Co-founder and Chairman, Moderna; CEO, Flagship Pioneering
- Stéphane Bancel, Chief Executive Officer, Moderna
- Stephen Berenson, Managing Partner, Flagship Pioneering
- Sandra Horning, M.D., Co-founder and Advisor, EQRx
- Robert Langer, Sc.D., Academic Co-Founder, Moderna; David H. Koch Institute Professor, MIT
- Elizabeth (Betsy) Nabel, M.D., Executive Vice President for Strategy at ModeX Therapeutics
- François Nader, M.D., Former President, CEO and Executive Director, NPS Pharmaceuticals
- Paul Sagan, Senior Advisor and Executive-in-Residence, General Catalyst
- Elizabeth Tallett, Former Principal, Hunter Partners
What you should know before trading Moderna stock
Moderna trades on the NASDAQ exchange under the ticker symbol MRNA. In common with all companies quoted on the NASDAQ its shares actively change hands between 9.30am and 4.00pm Eastern Time (usually five hours behind the time in the UK), Monday to Friday (excluding nine federal holidays).
Moderna proceeded to a successful initial public offering in December 2018 but its shares have become particularly popular trading instruments since the second half of 2020. Because of that popularity, the market in Moderna shares tends to show good liquidity, with tight margins. Risk management strategies are advised when trading Moderna, because it is a stock that can trade with a degree of volatility.
How to trade Moderna stock
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