Moderna ( MRNA 11.79% ) has been one of the leaders in the race to develop a coronavirus vaccine, and as a result, its shares have soared by more than 600% this year. In March, the clinical-stage biotech became the first to begin human trials of a COVID-19 vaccine candidate. That candidate, mRNA-1273, moved smoothly and swiftly through clinical studies, and this week, an FDA advisory panel recommended that it receive emergency use authorization.
Ahead of the panel's meeting, Moderna stock stumbled. As of 10:30 a.m. EST Friday, it was down by more than 14% for the week to around $138. The logical questions now are: Is FDA authorization of mRNA-1273 priced in at the current level? Or can Moderna surpass Wall Street's expectations and reach $200 in 2021?
Moderna climbed this year as investors bet that its COVID-19 work would deliver results. Next year, the catalyst that moves the stock will be its actual revenue from mRNA-1273. The price that Moderna is charging for its vaccine varies according to order size and other factors. But to simplify these back-of-the-envelope calculations, let's use the price the U.S. paid as a guide: $1.5 billion for 100 million doses, or $15 per dose. Moderna plans to produce as many as 125 million doses in the first quarter. That would equate to revenue of more than $1.8 billion.
Prior to this, Moderna didn't have product revenue, so a billion-plus-dollar quarter is significant. And given the massive global demand for coronavirus vaccines, we should expect its sales to remain high for some time. Moderna plans to manufacture between 500 million and 1 billion doses of mRNA-1273 in 2021.
Among the Wall Street analysts who cover Moderna, the highest 12-month share-price target calls for a 34% increase from today's level to $185. Coronavirus stocks outpaced analysts' targets this year, based on a lot of hope and plenty of unknowns.
These days, we have more information -- including ballpark estimates for sales and an idea of the competitive landscape. That data makes it easier for analysts to predict share performance.
Considering its revenue potential, Moderna stock may reach $185 in the coming year. But I'm not as confident about the stock hitting $200 so quickly -- unless the company surprises investors with production, market share, or sales gains. In any case, with billions of dollars in revenue on the horizon, this biotech company is likely to continue its stock market winning streak in 2021.