2020 is now hindsight. And what a year it was for Moderna (MRNA +2.77%).
The biotech became a household name as it regularly reported encouraging news for its COVID-19 vaccine candidate mRNA-1273. Its share price skyrocketed 434% (and peaked even higher than that). In December, mRNA-1273 became the second COVID-19 vaccine to win U.S. emergency use authorization (EUA).
You might think that the new year could be kind of dull compared to all of that excitement. That won't necessarily be the case, though. Here are three big potential catalysts for Moderna in 2021.
Image source: Getty Images.
1. Tremendous financial success
It's no secret that Moderna is about to make a lot of money off of mRNA-1273. Just look at the supply deals the company has already lined up:
| Country | Number of Doses |
|---|---|
| U.S. | 300 million |
| Canada | 40 million |
| Qatar | Undisclosed |
| Japan | 50 million |
| U.K. | 7 million |
| European Union | 160 million |
| Israel | 6 million |
| Switzerland | 7.5 million |
| Singapore | Undisclosed |
| South Korea | 40 million |
Data sources: Moderna press releases.
These supply deals combined will more than consume the low end of Moderna's anticipated 2021 production range, which the company recently increased to 600 million doses. However, Moderna continues to ramp up with the goal to be able to produce up to 1 billion doses of mRNA-1273 this year.
Bernstein analyst Ronny Gal estimates that Moderna will rake in around $11 billion in revenue from mRNA-1273 in 2021. That projection could be overly pessimistic if Moderna is able to crank out higher production. Any increase in production capacity will likely serve as a positive catalyst for shares.
Even if Moderna isn't able to boost its production, I expect the biotech's first quarterly update for fiscal year 2021 will be widely celebrated. Even though investors know that Moderna will make a lot of money, there's nothing like seeing billions of dollars in sales reported in a financial update for a company that previously hasn't generated any product revenue.
2. Key clinical trial updates
Biotech stocks nearly always move one direction or the other on clinical updates. And Moderna should have several key clinical trial updates on the way this year for its messenger RNA (mRNA) candidates.
In November, Moderna reported encouraging interim results from a phase 1 study evaluating a combination of personalized cancer vaccine mRNA-4157 and Merck's immunotherapy Keytruda in treating patients with head and neck cancer and colorectal cancer. More data from this study could be announced in 2021. It's also possible that we could hear from the partners about interim results from a phase 2 study of mRNA-4157 and Keytruda in treating melanoma toward the end of this year.
Moderna is also likely to announce interim results from a phase 1/2 study evaluating mRNA-2416 as a monotherapy and in combination with AstraZeneca's immunotherapy Imfinzi in treating solid tumors and ovarian cancer later in 2021. In addition, a phase 1 study of mRNA-2752 as a stand-alone therapy and in combination with Imfiniz targeting the treatment of several types of cancer is scheduled to conclude in July.
Perhaps the most important clinical update for Moderna, though, relates to its cytomegalovirus (CMV) vaccine candidate mRNA-1647. Moderna reported positive interim data from a phase 2 study of the experimental vaccine in September. It plans to kick off a pivotal phase 3 study this year.
3. Expanding its pipeline
What will Moderna do with the boatload of money that it's going to make this year? Invest it in expanding the development pipeline. I suspect that the biotech will announce multiple new clinical programs over the course of 2021, several of which could be solid catalysts.
One that seems to be a no-brainer is a seasonal flu vaccine candidate. Moderna stated at its annual R&D day in September that it plans to jump into the flu market. CEO Stephane Bancel said the company was making the move "given the unmet need for highly effective vaccines."
I wouldn't be surprised if Moderna follows in the footsteps of Novavax and explores the possibility of developing a combo COVID-19/flu vaccine as well. My hunch is that this would be well-received by investors.
Potential wild cards
There are always potential wild cards that could come into play as well. Two that especially stand out in my view are the prospects for a shake-up in the dynamics for the COVID-19 vaccine market and the possibility of mergers and acquisitions.
Should other leading COVID-19 vaccine makers stumble, it could leave Moderna and Pfizer pretty much splitting up the market. By the way, stumbling doesn't necessarily mean clinical failure. Moderna and Pfizer have established a high bar for efficacy that other vaccines might not be able to attain.
Could Moderna be bought in 2021? Maybe, although I wouldn't bet on it. On the other hand, there's a chance that the company could use some of its newfound riches to buy a smaller biotech.
I don't think that any wild cards are needed to drive Moderna's shares higher this year. But with its market cap now well above $40 billion, don't expect Moderna to deliver a 5X return as it did in 2020.
