The coronavirus pandemic has resulted in nearly 2 million confirmed cases worldwide, leaving businesses closed and people on lockdown to avoid further spread.
Since there is no approved treatment or vaccine currently available, the company that's first to bring one to market will surely grab the world's attention. For Moderna (MRNA 0.46%), however, a possible win would mean even more.
So why am I speculating that Moderna may make it to the finish line first? After all, there are more than 70 vaccine candidates now being investigated worldwide, according to the World Health Organization.
Last month, Moderna became the first company to begin human trials of an investigational vaccine for COVID-19, the illness caused by the novel coronavirus. If the phase 1 trial goes smoothly, Moderna will clearly be one step closer to approval than its competitors that start trials later.
Moderna isn't alone at the head of the race, though. A day after Moderna said it had dosed its first trial participant, China's CanSino Biologics announced it had received approval to start a phase 1 trial. Earlier this month, CanSino said in a regulatory filing that it would begin a phase 2 trial "soon."
As for Moderna, chairman Noubar Afeyan told CNBC in an interview that its phase 2 trials could begin as early as this spring. Other competitors' products are currently in the pre-clinical stage.
Validating the technology
If all goes right during Moderna's trials, it has a solid chance of being first or second to market -- and that means making more than a few headlines. More importantly for this clinical-stage company, an approval of Moderna's COVID-19 vaccine would validate the company's technology. The more than 20 candidates in Moderna's pipeline are based on harnessing the power of messenger RNA (mRNA), which carries instructions from DNA to the part of our cells that produces the proteins our bodies need to function. Using mRNA, Moderna's investigative products give the body's cells instructions to make proteins that would prevent or treat disease.
Moderna's investigational products are in phase 2 studies or earlier, so efficacy in humans hasn't yet been fully determined. If Moderna is able to show the efficacy of mRNA in the COVID-19 vaccine, this won't guarantee the technology will work in every indication, but would add evidence that it could work in other indications. With this, investors would have reason to be more confident about the use of the technology in Moderna's other programs.
Getting a product on the market
Finally, if Moderna's COVID-19 vaccine candidate is approved, the company will have a product on the market sooner than expected. Since prevention and treatment are urgently needed, the government is making efforts to speed up the clinical trials process. For example, the Department of Health and Human Services is offering funding to ramp up manufacturing, as thousands of doses would be needed if Moderna's vaccine goes into phase 2 and 3 trials.
According to a regulatory filing, Moderna CEO Stephane Bancel told Goldman Sachs that the vaccine may be available to healthcare workers by this fall, though it would be 12 to 18 months before it would be available to the general public. Any early use would be under an emergency authorization by the U.S. Food and Drug Administration.
Considering the research stages of its pipeline, Moderna was likely years away from a drug or vaccine approval, so the coronavirus project clearly has the potential to offer the company a serious push forward. Its shares have gained 77% so far this year, and the rising short interest in the stock is a concern.
I personally wouldn't buy shares of Moderna right now; I'd want to see safety and efficacy data from the vaccine trials first. Biotech investors should keep an eye on that data, as it could be a key indicator of how the company will fare over the longer term.