There are multiple bear arguments floating around as reasons to sell Moderna (NASDAQ:MRNA), one of the drugmakers leading the way to develop a coronavirus vaccine.

Most of them don't hold much water.

  • Executives have sold shares: While it would be great if executives would hold forever, can you blame them for diversifying their portfolios that have become overweighted after the stock has run-up this year?
  • Moderna lost a petition trying to invalidate patents held by Arbutus Biopharma (NASDAQ:ABUS): The patents are unlikely to keep Moderna's coronavirus vaccine, mRNA-1273, off the market. The biggest impact would be Moderna having to pay royalties to Arbutus on sales of mRNA-1273.
  • mRNA-1273 has lots of competition: In the short term, this isn't going to be a winner-takes-all market, as companies won't be able to manufacture enough vaccine to meet demand. As long as vaccines are efficacious enough to get approved by regulators, the second- and third-best vaccines will sell out until manufacturing of the best vaccine is able to ramp up to meet demand.
Gloved hands pushing a syringe into the upper arm of a masked patient

Image source: Getty Images.

But there is one reason to sell Moderna that seems perfectly valid: It's nearly impossible to value the biotech right now.

Moderna's valuation will be determined by the cost of the vaccine (unknown), net margin (unknown and further complicated by the Arbutus patent fight), and the number of doses Moderna can manufacture (the company estimates it can make 500 million doses per year, with the potential to increase the output to 1 billion doses starting in 2021).

Even if all three of those components were known and investors could accurately estimate 2021 profits, Moderna's valuation will ultimately be determined by its multiyear profit potential. If mRNA-1273 produces long-lasting immunity, sales of the coronavirus vaccine will be limited to just one regimen (two doses) per patient, limiting sales to just a couple of years until the world is fully vaccinated.