Shares of vaccine specialist Moderna (MRNA 3.17%) are under enormous pressure Tuesday morning following a sizable downgrade from SVB Leerink. Citing competitive pressures in the COVID-19 vaccine space, the investment firm lowered its 12-month price target on Moderna's shares to $41 from $58.
Basically, Leerink is calling for Moderna's shares to fall by a hefty 34% compared with where they closed last Friday. In response, the biotech's stock is off by a noteworthy 11.4% as of 9:47 a.m. EDT Tuesday.
Although Moderna was the first company to enter human trials with its COVID-19 vaccine candidate known as mRNA-1273, AstraZeneca and Pfizer appear to have overtaken their smaller peer from a development standpoint. Pfizer, in fact, might have its COVID-19 vaccine on the market through an emergency use authorization by Halloween. And AstraZeneca probably won't be far behind.
Moderna, by contrast, is expected to have its vaccine ready for widespread public use toward the end of the year. If this timeline holds up, Moderna may end up losing a sizable chunk of market share to its chief competitors.
Is this analyst downgrade overly pessimistic? Unfortunately for shareholders, the answer is probably a no. Moderna doesn't have any approved products to fall back on in case it can't beat either AstraZeneca or Pfizer to market, and these two big pharmas have the commercial infrastructure in place to gobble up market share in a hurry. In short, this clinical-stage biotech stock has probably already seen its high-water mark from the COVID-19 vaccine race.