It was a big year for biotech venture capital and initial public offerings (IPO), but no IPO was bigger than Moderna's (NASDAQ:MRNA) public debut. The clinical-stage biotech is researching programs that use our bodies to create therapeutic proteins that could reshape treatment, but its $7.5 billion IPO made Moderna the biggest biotech unicorn to list on a major market exchange this year. Is Moderna worth the hype?

In this clip from The Motley Fool's Industry Focus: Healthcare, analyst Shannon Jones and Todd Campbell discuss Moderna's business model and its pace-setting IPO.

A full transcript follows the video.

This video was recorded on Dec. 12, 2018.

Shannon Jones: Also, 2018 saw the historic public debut of biotech unicorn Moderna Therapeutics, ticker MRNA. Todd, do you think this company is really worth the hype that has gone into it? [laughs]

Todd Campbell: There were so many biotech IPOs this year. I think one of the reasons that biotech was actually down this year was because there was so much more supply coming onto the market. After a couple of years of rallying for these stocks, investor appetite just started to wane for them.

Does Moderna mark the peak of this cycle for biotech? I guess that remains to be seen. But, yeah, $604 million IPO. That ends up valuing, if you include the shares that weren't issued out to the public, the company at $7.5 billion. Which is a really, really big valuation for a company that has its most advanced drug in Phase II, and may not even have data from Phase II trials that we can get excited about until at least 2020.

Jones: Yeah, but they do have a pretty stacked pipeline. You're looking at 10 therapies in human trials, 11 preclinical. One of the things I do like about this company is that it's not just about one particular type of therapy or technology. They're really building an R&D platform. The applications of using messenger RNA to identify targets, to tweak targets, I think, is really promising. Certainly something to keep an eye on.

One of the things that I always caution when I see the IPO market blow up in a particular year, you can expect to see, as a result of that, many more pipeline blow-ups. If you think about it, the more money you're throwing at many of these very small biotechs, the higher the likelihood that many of these won't make it. That's always a pause for me heading into the new year, when I see that we've come off a really strong IPO market. But this one is definitely one to watch.

Campbell: That's an awesome point, Shannon! Before we jump into No. 10, that's an awesome point to remember. You're right, when you have so much money that's just sloshing around, it's no longer only the best ideas attracting that venture capital. Now, you've got a lot of different ideas that are attracting that venture capital, and that increases the risk that a lot of the exciting stocks that have come on and IPO-ed in the last couple of years end up fizzling out.

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