Moderna (MRNA 3.45%) has made some investors quite wealthy this year. Its shares have skyrocketed over 680% year to date fueled by excitement over its COVID-19 vaccine program.
There probably aren't many individuals, though, who have become millionaires by investing in Moderna stock. Nearly all of the biotech's gains since its initial public offering in late 2018 were generated in 2020. It would have taken an initial investment of over $120,000 in Moderna to grow to $1 million.
But could Moderna be a millionaire-maker stock? It's possible. Here are the three steps the biotech needs to take to make it happen.
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1. Achieve success for mRNA-1273
Moderna's COVID-19 vaccine mRNA-1273 is the linchpin for the company's future fortunes. If the vaccine achieves success, Moderna will move up to a new level. The good news is that the prospects for mRNA-1273 appear to be better than ever.
The company filed for emergency use authorization (EUA) for mRNA-1273 on Nov. 30. An FDA advisory committee is scheduled to meet on Dec. 17 to review that submission. It's possible that Moderna's COVID vaccine could win approval and begin shipping in the U.S. before the end of the year. The European Union, Canada, the U.K., and Switzerland could also soon approve or grant emergency authorization to mRNA-1273.
Assuming mRNA-1273 sails through the regulatory approval process, Moderna stands to receive billions of dollars in a short period of time. The biotech has supply deals in place with the U.S., Canada, the U.K., the E.U., Japan, Israel, Qatar, and Switzerland. And that's just a start.
2. Invest heavily in expanding pipeline
Sure, Moderna's market cap of close to $60 billion already reflects much of the revenue potential for mRNA-1273. But the biotech's pipeline prospects aren't fully baked into its share price. That's especially true considering that Moderna is about to have a lot of money to invest heavily in expanding that pipeline.
Moderna plans to advance experimental cytomegalovirus (CMV) vaccine mRNA-1647 into late-stage testing next year. It has two other mRNA therapies and vaccines targeting cancer in phase 2 testing plus another mRNA therapeutic candidate licensed to AstraZeneca targeting coronary artery disease. In addition, the biotech's pipeline includes seven early-stage candidates.
However, Moderna CEO Stephane Bancel has indicated that the company plans to invest its newfound riches from mRNA-1273 into significantly beefing up its pipeline. He thinks that Moderna could advance up to 50 mRNA candidates into clinical testing, notably including an mRNA seasonal flu vaccine.
3. Launch successful new mRNA therapies and vaccines
The most challenging step for Moderna will be to launch new mRNA therapies and vaccines to build on its anticipated success for mRNA-1273. Can the company pull this off? There's a good reason to believe it can.
Moderna has long expressed confidence that if the mRNA approach works for one disease it will work for lots of other diseases. With this approach, mRNA is essentially programmed to contain the instructions for the body's cells to produce a targeted protein. For mRNA-1273, that targeted protein is the spike protein that's on the surface of the novel coronavirus that causes COVID-19.
The biotech thinks that it can take the same approach used with mRNA-1273 and apply it to spur the body to build proteins associated with other viruses. In theory, Moderna could develop safe and effective vaccines for every known virus that infects humans. And because proteins are critical in other non-viral diseases (especially cancer), the sky's the limit on what the biotech might be able to achieve with its mRNA technology.
Possible but not probable
For Moderna to be a millionaire-maker with an initial investment of $10,000, the biotech stock would have to multiply 100 times over. That means the company would have to increase its market cap to $600 billion. The biggest healthcare company in the world has a current market cap of only around $400 billion.
Keep in mind also that Moderna isn't the only drugmaker focused on mRNA vaccines and therapies. There's no guarantee that rivals won't develop better products.
Make no mistake about it: It would be very difficult for Moderna to make you a millionaire without a really large initial investment. But given enough time and successful mRNA therapies and vaccines, there's at least an outside chance it could happen.
The bottom line is that it's possible that Moderna could be a millionaire-maker stock, but it's not probable. To become a millionaire, your best bet is to invest more money in more stocks. However, Moderna could be a pretty good start.
