After publishing encouraging phase 3 data for its RSV vaccine, Moderna stated, its stock is marching higher today. Will this rally still be going in 2023?
The value of Moderna shares has increased today as a result of the biotech business disclosing promising findings from one of its phase 3 clinical trials. The Moderna stock is up 8% as we type.
Data from a trial for the company’s mRNA-1345 vaccine candidate demonstrated an efficacy of 83.7% against the respiratory syncytial virus (RSV) in older persons, according to the company. On the basis of these findings, Moderna plans to request FDA regulatory approval for the vaccine by the middle of 2023.
What is mRNA?
The body’s cells are given instructions via messenger RNA (mRNA) on how to make proteins that can fend off or treat illnesses. Its technology essentially converts human cells into medication production facilities.
Thanks to the coronavirus, we are aware that this technology functions in people. This came when authorities during the pandemic gave new mRNA vaccinations fast-track approval.
The concept of programming body-like software is obviously groundbreaking. And a very disruptive one if it extends beyond Covid’s current use. There is now more and more proof that it could.
Personalized cancer vaccinations
Moderna announced last month that its customized mRNA cancer vaccine was successful in treating metastatic melanoma. The vaccine and Merck’s immunotherapy medication Keytruda together decreased the chance of recurrence by 44% in this phase 2 clinical trial.
This perspective therapy differs from the Covid vaccination, though. This is so that it may only be used once the sickness has already begun. The severity of cancers varies greatly from person to person. This adds complexity and risk because each vaccine must be specifically tailored for the tumor of each patient.
Even if successful, it will be many years before Moderna can bring the medicine to market. This year will see the beginning of a phase 3 study in melanoma patients before other tumor types are targeted.
Interestingly, Moderna created the Covid vaccine in just two days without even having contact with a live virus. That illustrates how quick and strong its platform is.
But to make up for falling sales of its Covid vaccine, it will need to move equally quickly with its 36 ongoing clinical investigations. The projected revenue for 2022 is $18.4 billion. Sales should then decline to about $9 billion in 2023.
This makes it challenging for me to determine the current worth of Moderna stock. Its current price-to-earnings (P/E) ratio of 7.3 would increase to almost 47 if sales do really decline by 50% in 2023. But perhaps P/E ratios aren’t yet suitable for a technology that has the potential to be as transformational.
No one is certain how much demand there will be for the Covid vaccination when it launches on the private market or how much it will cost. Additionally, Moderna is not the only biotechnology business advancing this field of study. The first mRNA vaccination to be approved for use in the US was actually given by Pfizer and its partner BioNTech.
In fact, Moderna and these two businesses are engaged in an ongoing patent dispute over the use of mRNA technology. Depending on the outcome of this legal dispute, this could be risky.
All of this leads me to believe that today’s stock market boom may not last very long. We currently maintain a position in the stock, which we are glad to do.