![]() ![]() For example, not all viruses are similar to Covid, which mRNA might be better at mimicking. That said, Moderna’s success with Covid doesn’t guarantee that its vaccines and therapeutics in other areas, such as cancer, will be as effective. The speed and the efficacy of the Covid vaccine also indicate that Moderna could leverage this technology to develop new lines of vaccines against a variety of viruses. For perspective, the Covid-19 vaccine was apparently designed within a few days. Once the genetic code of a virus is available, Moderna essentially adapts messenger RNA to trigger the immune system to produce protective antibodies without using the actual part of the virus, unlike traditional vaccines. mRNA offers significant flexibility with vaccine and potentially drug development. While the EPS impact of the Covid-19 vaccine could be fleeting, the validation of Moderna’s messenger RNA (mRNA) technology could be far more consequential for investors. Once a large percentage of the global population is vaccinated (likely by 2022 or 2023) the earnings potential of the Covid vaccine will diminish. There is a lot of competition in the race for a Covid-19 vaccine, and it’s likely that there will be multiple successful candidates from other companies. However, it should be noted that sales of the vaccine will be significantly front-loaded. That’s below the S&P 500 that trades at about 26x projected earnings. (related: How Will The Covid-19 Vaccine Impact Moderna’s EPS?) While Moderna’s stock trades at about $150 per share, its valuation still looks reasonable at about 25x our projected 2020 EPS. We estimate that the vaccine will add roughly $6 to Moderna’s EPS each year over 20. The vaccine is likely to be priced at between $25 to $37 per dose, with two doses required per person. Moderna’s Covid-19 vaccine could emerge as the most sought-after vaccine, particularly in developed markets – considering the high levels of efficacy as well as manageable refrigeration requirements, unlike Pfizer’s candidate which is also highly effective but needs to be stored at ultra-cold temperatures. Is this jump warranted? We think it largely is, but there are some risks as well. The stock has more than doubled over the last month as the company began publishing efficacy data. ![]() Investors cheered the news, sending Moderna stock up by about 20% on Monday’s trading. The vaccine was over 94% effective in preventing Covid-19 and 100% effective in preventing severe cases of infection – meaning that no one who received the vaccine developed a serve case of the infection. Moderna (NASDAQ NDAQ: MRNA) published final results from its 30,000-person phase 3 trial of its Covid-19 vaccine and indicated that it would apply for emergency use authorization with the U.S. The theme is up by about 877% year-to-date versus about 14% for the S&P 500. ![]() See our indicative theme of Covid-19 Vaccine stocks – which includes U.S.-listed pharma and biotech companies. ![]()
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