Moderna Stock Plunges Despite ‘Vaccine Day’ Touting 31 New Shots And $21 Billion In Sales—Here’s Why

Topline

Though Moderna hosted an investor seminar Thursday touting the firm’s growing vaccine pipeline and climbing sales, shares of the Cambridge, Mass.-based biotech firm plunged on Friday as analysts questioned the strength of certain trial results and pointed out investors are still focused on the long-term viability of the company’s revenue from Covid-19 vaccines.

Key Facts

Shares of Moderna fell as much as 8% Friday to about $165, paring recent gains that helped offset a nearly 60% plunge as Covid vaccination rates leveled off over the past six months.

The latest decline comes one day after Moderna held its third annual “Vaccine Day” for investors to discuss its growing pipeline of 31 vaccines—including some against specific Covid variants, the seasonal flu, HIV and herpes—and share trial results, along with other data.

Though new orders from Japan and Colombia helped Moderna boost its expected revenue from Covid vaccines this year from $19 billion to $21 billion, the firm also shared phase-two trial data for its flu vaccine candidate that showed only “similar” efficacy to standard flu shots, making it difficult to say whether the candidate is “necessarily better,” Jefferies analysts said Friday.

Other analysts were harsher on the data, with SVB Leerink’s Mani Foroohar calling the results a “non-starter for the influenza market” both commercially and clinically, and saying any further development of the candidate would be a “poor use” of Moderna’s resources.

Though several analysts praised Moderna’s efforts to develop vaccines against latent, or dormant, viruses—including cancer, multiple sclerosis and congenital deafness—a few acknowledged investors are still focused on the firm’s Covid offerings.

Morgan Stanley, which holds a price target of $170 for Moderna shares, pointed out it’s unlikely the United Nation’s Covax will exercise its option to purchase additional doses by an April 1 first deadline, while lawmakers in the U.S. struggle to secure additional Covid funding.

Contra

Among Wall Street’s most bullish Moderna analysts, Piper Sandler’s Edward Tenthoff issued a $348 price target for shares following the company’s investor presentation—implying more than 100% upside from current levels. The firm’s Covid vaccine has been a “financial windfall” that bodes well alongside a “dramatically expanded” pipeline, Tenthoff said.

Crucial Quote

“There’s no denying the significant progress made within the company’s vaccine modality… Some of these [candidates] could prove to be key to the story’s evolution over the intermediate-to-long term,” JP Morgan analyst Cory Kasimov wrote in a Thursday note. “But nearer term, we suspect investor focus will remain on Covid-19 sustainability.”

Key Background

Covid-19 vaccines have proven to be highly effective in preventing serious illness and hospitalization, but experts have increasingly warned that overly high revenue expectations set last year may not be sustainable as the pandemic wanes. Even after a recent recovery, Moderna shares have crashed 66% from an all-time high of $497 set in August. In a note during the plunge, Jefferies analyst Michael Yee said the stock drawback has helped put Moderna’s valuation in line with other biotechnology competitors, but he pointed out analysts increasingly expect Covid vaccine sales—currently Moderna’s sole revenue source from a commercialized product—will fall over the next few years as the pandemic becomes endemic and competition heats up among treatment and prevention options.

What To Watch For

“We see any wave [of infections] during 2022 to possibly drive stock resurgence, but interestingly we believe investors would really like the stock to not be so volatile around Covid and to instead find value from the rest of the pipeline,” Yee said Thursday.

Big Number

$18.5 billion. That’s how much revenue Moderna reported for last year after delivering some 807 million vaccine doses worldwide, skyrocketing from $803 million in 2020.

Further Reading

Moderna Stock Crash: Losses Top $140 Billion As Insiders Sell Millions Of Dollars In Shares (Forbes)

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