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Why Moderna Stock Jumped Today

By Joe Tenebruso – Jul 27, 2020 at 4:28PM

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The drugmaker took an important step forward in its coronavirus vaccine development efforts.

What happened

Shares of Moderna (MRNA -3.84%) climbed on Monday, following news that the biotech company had begun its phase 3 study of its COVID-19 vaccine candidate and received additional funding from the U.S. government.

By the close of trading, Moderna's stock price was up more than 9%.

So what 

Moderna disclosed on Sunday that the Biomedical Advanced Research and Development Authority (BARDA) would provide it with up to $472 million in additional funding to further the development of its experimental COVID-19 vaccine, mRNA-1273. Combined with BARDA's previous commitment for $483 million, Moderna has now been awarded a total of $955 million in U.S. government funding. 

People in lab coats working in a laboratory.

Moderna's stock rose sharply on Monday. Image source: Getty Images.

On Monday, Moderna said that it had begun dosing participants in its phase 3 study for mRNA-1273. The National Institute of Allergy and Infectious Diseases (NIAID) will work with Moderna to conduct the randomized, placebo-controlled trial, which is expected to include as many as 30,000 participants. 

Now what

It would be a boon for Moderna -- and its shareholders -- if its experimental vaccine proves both safe and effective against COVID-19. Moderna said it will be capable of producing roughly 500 million doses per year -- and possibly up to 1 billion doses per year -- starting in 2021, due in part to the supply and manufacturing deals it has in place. 

Still, while early results for Moderna's COVID-19 vaccine candidate have been promising, there's still the risk that the drug's phase 3 trial will be unsuccessful.

Moderna CEO Stephane Bancel, however, remains undaunted. "We look forward to this trial demonstrating the potential of our vaccine to prevent COVID-19 so that we can defeat this pandemic," Bancel said. 

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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