Written by Norman Isaac Mwambazi

Moderna stock outperforms market on strong trading day

Although the world has paid more attention to the COVID-19 vaccine announced by American pharmaceutical Pfizer and their collaborators BioNTech …

Although the world has paid more attention to the COVID-19 vaccine announced by American pharmaceutical Pfizer and their collaborators BioNTech from Germany, there is another vaccine candidate developed by another American biotech company known as Moderna Inc. (ticker: MRNA).

Moderna announced their COVID-19 vaccine named mRNA-1273 over a week after Pfizer’s announcement, and they say it is 94% effective in preventing COVID-19 infections, according to an analysis of data from its extensive clinical trials. The company said that over 30,000 people volunteered for the testing process.

What is left now is to get Emergency Use Authorization (EUA) from the US and international health bodies for it to start rolling out the vaccine on a large scale.

Moderna has performed well during the pandemic, seeing record highs in both revenues and share prices and on Tuesday, December 8, 2020, the company outperformed the entire stock market.

Shares of Moderna Inc. rose 6.48% to $169.86 with the NASDAQ Composite Index rising 0.50% to 12,582.77 and the Dow Jones Industrial Average rising 0.35% to 30,173.88. This was the stock’s second consecutive day of gains. The biotech company closed $8.64 below its 52-week high ($178.50), which the company achieved on December 1st.

The stock outperformed some of its competitors too. For instance, AbbVie Inc. rose 1.75% to $107.69, Amgen Inc. rose 1.10% to $228.94, and AstraZeneca PLC, who is also working on a COVID-19 vaccine, rose 0.85% to $54.72.

Expectation

So with Moderna’s previous and current performance on the stock market, what do investors and analysts expect of it?

Firstly, the company has an agreement in place to supply 100 million vaccine doses to the US government for $1.225 billion and an EUA bonus of $300 million by January 31, 2021. It also has options for four more 100 million dose deliveries, each worth $1.65 billion. Of these, 100 million more vaccine doses will be delivered in the US (total 200), and 300 million outside the US in 2021.

Alan Carr, a Senior Analyst specialising in the biotechnology industry at Needham & Company, an independent investment bank and asset management firm advises that the best option to do for Moderna’s stock now is to hold it, and he explains why.

“Moderna has made significant progress in 2020 towards validation of its mRNA platform, particularly through the discovery and development of COVID-19 vaccine mRNA-1273. The stock has responded remarkably well and we now believe it is fully valued.

“The stock may react favourably to EUA issuance, but we do not believe it will justify a meaningfully higher price target. We await competitor vaccine updates and additional data from other Moderna programs, which may support a higher valuation,” Carr said.

However, Carr said that there may be an upside on Moderna’s stock, and this is based on the failure of its competitors like AstraZeneca, Johnson & Johnson, Sanofi, and Novavax among others to deliver strong clinical data of their COVID-19 vaccines from their respective late-stage studies.

Currently, Moderna’s stock is going for  155.69 per share, and it has a market capitalisation of $61.61 billion.

EDITOR’S NOTE: Quoted prices may change any time. Moderna company Logo by Terrence Horan.