Moderna (NASDAQ:MRNA) has already grabbed plenty of headlines in 2020 while racing through the development and testing process for its experimental COVID-19 vaccine, mRNA-1273. But its biggest headline yet came Monday, when it kicked off the pivotal phase 3 clinical trials. 

These trials, which the company is running in collaboration with the National Institutes of Health and the Biomedical Advanced Research and Development Authority, will enroll about 30,000 participants. The primary goals is to learn whether -- and how well -- mRNA-1273 can prevent people from getting symptomatic cases of COVID-19.

Investors have bid up this biotech significantly based on its coronavirus-related efforts: Year to date, shares of the company are up by 307%, giving it a market cap of $29.5 billion. But is now a good time to buy Moderna stock?

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The "it's too risky" view of Moderna

First, let's weigh some of the risks involved. As a clinical-stage biotech company, Moderna has no products on the market. And though the business was founded back in 2010, mRNA-1273 is presently the only one of its candidates in late-stage testing. Given that, it should come as no surprise that Moderna generates little in the way of revenue. During the first quarter, it posted total revenue of $8.4 million and booked a net loss of $124.2 million. The company's stock performance in the near to medium term, then, will depend on mRNA-1273. And at this point, it has yet to conclude its phase 2 study for the candidate. 

Further, given how far investors have bid up the company's stock based on their hopes that its coronavirus vaccine will work, there's a long way for the share price to plunge if mRNA-1273 fails to deliver. Nor should investors forget how many other companies are making headway in their own quests to develop COVID-19 vaccines. For instance, Pfizer and BioNTech are working together on this project, and according to President Trump, they have a real chance of being the winners in this race.

Medical drugs forming a question mark.

Image source: Getty Images.

Pfizer and BioNTech have signed deals to provide both the U.S. and the U.K. governments with tens of millions of doses of their vaccine -- assuming it earns regulatory approval. And there are many other companies in contention. If one of them receives regulatory approval before Moderna, it will be great news for the world -- but not for investors, who would likely react by selling off the biotech. Even if Moderna is the first one to cross the finish line, others could be close behind with vaccines that are as good or better, which would undercut the company's market opportunity.

Given all these obstacles lurking, it may be best to watch how the story unfolds from a safe distance.

The "it might be worth jumping in anyway" response

Despite the risks, Moderna has several things going its way. Most notably, the results from its phase 1 clinical trial for MRNA-1273 were quite encouraging: The vaccine was generally "safe and well-tolerated," and produced neutralizing antibodies in all of the study's participants. Sure, this was just an early trial, but at this point, few of Moderna's peers have delivered similarly impressive results in human clinical trials. And considering that it's one of the very few to have started a phase 3 coronavirus vaccine study, it isn't surprising that Moderna is winning favor. 

Naturally, things could change at any moment as new results are published from clinical trials. And first does not mean best -- about two-thirds of vaccine candidates do not pan out, a 2018 study published in the journal Biostatistics notes.

But if the reasons for investing in Moderna are shaky, the arguments for investing in most other clinical-stage biotech companies working on coronavirus vaccines are even weaker. An investment in Moderna may come with a moderate amount of risk, but the stock could deliver massive gains over the next year or so if MRNA-1273 is good enough to earn FDA approval. And to do that, the company only will need to show that its vaccine is 50% better than a placebo. Given all that, investors who can stomach a little risk and volatility would do well to consider initiating a small position in this biotech stock.