Please ensure Javascript is enabled for purposes of website accessibility

Why Moderna Shares Tripped on Tuesday

By Eric Volkman – Aug 18, 2020 at 6:44PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A Chinese pharmaceutical company makes a pronouncement that spooks the biotech's investors.

What happened

Moderna (MRNA 0.15%), considered by some to be the leader of the pack of coronavirus stocks at the moment, fell by 3.9% Tuesday on what was generally an up day for the broader stock market.

The most likely reason for this is the pronouncement of a Chinese pharmaceutical company, Sinopharm, which on Tuesday set a price range for its two COVID-19 vaccine candidates. 

A syringe being filled with a vaccine from a vial.

Image source: Getty Images.

So what

Like Sinopharm, Moderna is in late-stage testing of a vaccine candidate, the quite promising mRNA-1273. Moderna investors might have been spooked by the Chinese company's announcement of a price range, as it could imply that one or both of Sinopharm's candidates will soon be ready for regulatory review.

Probably almost immediately after that -- given the vast need for a vaccine -- it would be made available for public consumption.

Sinopharm's chairman, Liu Jingzhen, told China's Guangming Daily that his company's vaccines would cost less than the equivalent $145 for two doses, if either or both receive regulatory approval. Liu didn't specify whether he meant the list price or out-of-pocket-cost. 

Now what

That price is well above Moderna's stated "budget" range for mRNA-1273 of $32 to $37 per dose, and it's also higher than other Western developers' pricing targets. But first-mover advantage is going to be significant with coronavirus/COVID-19 vaccines, and a relatively small biotech like Moderna could face a serious challenge in trying to compete as a runner-up.

 

Eric Volkman 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$118.25 (0.15%) $0.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.