Moderna (MRNA 0.89%) could have a good chance of reporting positive news later this month from a late-stage study of coronavirus vaccine candidate mRNA-1273. Pfizer and BioNTech announced great efficacy results for their experimental COVID-19 vaccine BNT162b2 earlier this week, and both mRNA-1273 and BNT162b2 use a similar messenger RNA (mRNA) approach.
While Moderna could be about to have its moment in the spotlight, the biotech stock isn't exactly the ideal pick for many investors. After all, Moderna remains quite risky, with no products on the market yet. If you're a more risk-averse investor seeking exposure in the COVID-19 vaccine race, you'll probably want to look elsewhere. Forget Moderna -- AstraZeneca (AZN 0.49%) is a much stronger coronavirus stock.
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Comparing coronavirus programs
Moderna appears likely to win emergency use authorization (EUA) for mRNA-1273 before AstraZeneca receives EUA for its own coronavirus vaccine, AZD1222. However, it probably won't be a huge head start for Moderna. AstraZeneca expects to announce late-stage results for AZD1222 before the end of the year.
It's too early to know how AZD1222 and mRNA-1273 will stack up in terms of safety and efficacy. However, AstraZeneca could have at least a few advantages over Moderna.
First, AstraZeneca should have better manufacturing capacity than Moderna right out of the gate. The big drugmaker has lined up partnerships that it says will expand its global capacity to about 3 billion doses. By contrast, Moderna CEO Stephane Bancel stated in the company's Q2 conference call in August that Moderna would be able to produce 500 million doses of mRNA-1273 in 2021 (though he noted they were trying to get closer to a capacity of 1 billion doses).
Second, AstraZeneca won't have some of Moderna's logistical challenges; mRNA-1273 must be stored in extremely cold temperatures, while AZD1222 can be stored in a standard refrigerator. This could make AstraZeneca's vaccine more attractive than Moderna's, assuming the differences in safety and efficacy are minor.
A much bigger picture
There's a wider context for both of these companies than just their coronavirus programs. That broad view looks better for AstraZeneca than for Moderna.
AstraZeneca's current product lineup is loaded with blockbusters. Several consistently deliver strong double-digit sales growth, including cancer drugs Lynparza and Tagrisso, as well as diabetes drug Farxiga. The company's pipeline features 172 programs, with 24 of them in late-stage testing.
As mentioned already, Moderna doesn't have any approved products so far. The biotech's lead candidate is mRNA-1273. Moderna's pipeline includes more than a dozen clinical programs, but none (aside from mRNA-1273) is in a late-stage clinical study. One of the company's phase 2 candidates, an experimental therapy targeting coronary disease, is licensed by AstraZeneca.
It's no contest between the two drugmakers when it comes to their financial positions. AstraZeneca is on track to generate revenue of more than $26 billion this year with profits of over $5 billion. The company pays a dividend that yields close to 2.5%. Moderna's revenue, most of which comes from external funding deals and partnerships, will likely be less than $500 million in 2020. The company will also without question post a big net loss.
Simply stronger
Moderna could deliver much more explosive growth than AstraZeneca if mRNA-1273 is successful. That potential for growth comes with a much higher risk level, too.
Meanwhile, AstraZeneca's growth prospects look attractive even if they're not as great as Moderna's. Wall Street analysts project the company will increase its earnings by an average of 19% annually over the next five years. Although AstraZeneca faces some risks, especially pipeline risks common to all drugmakers, the reality is that it's simply in a stronger position than Moderna. The multinational company should be appealing to less aggressive investors.
