2020 has nearly come to an end, and the world is still engulfed in the deadly coronavirus pandemic. Globally, cases have crossed the 64 million mark, and there have been 1.48 million deaths from the virus worldwide. In the U.S. alone, 13.7 million cases have been reported as of Dec. 2, and there have been at least 270,000 deaths. As the number of confirmed cases rises, pharma and biotech companies are working quickly to bring a safe and effective vaccine to market.
The two leading players -- Pfizer (PFE -0.12%) (with its partner, BioNTech (BNTX -3.03%)) and Moderna (MRNA -0.22%) -- announced positive interim trial results from their vaccine candidates last month. Moderna's results for its COVID-19 vaccine candidate, mRNA-1273, released on Nov. 16, showed that the potential vaccine was 94.5% effective at protecting patients against COVID-19 infection.
It likely comes as no surprise, then, that its stock is up 650% year to date, while the S&P 500 has risen just 13%. mRNA-1273 has a few advantages over Pfizer's potential vaccine. But what else can Moderna offer investors? Let's take a look.
Moderna's potential vaccine could turn things around for the company
Moderna's phase 3 study, also known as "the COVE study," enrolled close to 30,000 participants in the U.S. This study is being conducted in collaboration with the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), the Biomedical Advanced Research and Development Authority (BARDA), and a few others.
In Moderna's most recent efficacy update, which was released on Nov. 30, it reported that its candidate's efficacy had dipped slightly to 94.1%. There results are still close to the 95% efficacy that Pfizer and BioNTech reported for their vaccine candidate on Nov. 18. mRNA-1273 did not produce any severe side effects besides fatigue, and there were no inoculated patients who developed severe cases of COVID-19 among those confirmed during the study.
Beyond efficacy, storage and transportation are also key concerns in the vaccine development process. There, it appears Moderna has an upper hand here. According to its recent announcements, its potential vaccine can be refrigerated for up to 30 days and kept at room temperature for up to 24 hours. In contrast, Pfizer's potential vaccine needs to be kept at -94 degrees Fahrenheit to remain stable for longer than five days. This will pose a challenge for Pfizer's vaccine and might just help mRNA-1273 seize a larger global market share.
The company announced its filing for Emergency Use Authorization (EUA) with the U.S. Food and Drug Administration (FDA) on Nov. 30. Moderna has also made deals with various governments to supply the vaccine doses. It said it will be ready with 20 million doses for the U.S. before 2020 ends, and could manufacture 500 million to 1 billion doses globally in 2021. The company has a contract with the U.S. government to provide 100 million doses, with an option for the government to demand 500 million more, if required. On Nov. 25, Moderna announced that the European Commission now has the option to receive between 80 million and 160 million doses of mRNA-1273.
On Nov. 29, Moderna noted an amendment in its deal with the U.K. government to supply even more doses of mRNA-1273. The company also has other deals with many smaller countries.
There are still a lot of risks involved that need clarification -- for instance, how long the protection from the potential vaccine will last and whether it will prove effective in children.
Moderna could be a savior if its vaccine candidate is successful. But it will have to continuously earn revenue from its COVID-19 vaccine to keep boosting its bottom line and stock price. That will only happen if the vaccination will be required annually. If any of the potential vaccines offer long-lasting immunity, the demand for Moderna's vaccine will ultimately fade. Note that Moderna also doesn't have any approved products in its line-up yet.
What else could make it a millionaire-maker stock?
The good news is that Moderna's COVID-19 vaccine candidate is charting an awesome path for its future. If approved by the FDA, it could generate a huge amount of revenue in the next three to four years, building up a stable cash reserve for the company. Moderna can utilize this reserve in further research and development of its products. For now, it has 21 clinical candidates under development. Investors have been interested in its other clinical trials for other treatments, including vaccines for cytomegalovirus, the Zika virus, and various types of cancer.
Another positive for Moderna is the mRNA technology that it is using not only for mRNA-1273, but also for many of its other potential treatments currently in clinical trials. Pfizer and BioNTech's mRNA-based COVID-19 vaccine candidate, BNT162b2, uses the same technology. If Pfizer and BioNTech's genetic technology also commercializes, it could invite a lot of attention to and trust in Moderna's drug development approach.
I still wouldn't consider Moderna a millionaire-maker stock until it has some approved treatments in its portfolio. With that said, its COVID-19 potential vaccine could boost progress for its other clinical programs, increasing the chances for some healthy gains for investors. Investors looking for long-term growth should seriously consider the biotech stock. However, keeping in mind the risks associated with the sector (especially those companies involved in the vaccine race), it would be wise to keep your investment allocation small.