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Why Moderna's COVID Vaccine Is Just the Tip of the Iceberg

By Keith Speights - Jan 23, 2021 at 6:03AM

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The biotech has a promising -- and expanding -- pipeline.

Investors have been excited for quite a while now about Moderna's (MRNA -1.08%) COVID-19 vaccine, mRNA-1273. And for good reason. Moderna stands to make billions of dollars this year from the vaccine. However, the biotech's pipeline has plenty of other promising candidates. In this Motley Fool Live video recorded on Jan. 13, 2021, healthcare and cannabis bureau chief Corinne Cardina and Fool.com writer Keith Speights discuss why Moderna's COVID-19 vaccine is just the tip of the iceberg for the company.

Corinne Cardina: Absolutely. Let's look at Moderna beyond its COVID-19 vaccine work. It currently has 24 mRNA development programs in its pipeline. Thirteen of those have entered the clinic. Are we just seeing the tip of the iceberg of what mRNA technology can do? Can you tell us about some of its most promising programs that could be future growth drivers?

Keith Speights: Yeah, Corinne. We, absolutely, I think, are just seeing the tip of the iceberg. I'm going to share my screen so we can take a look at Moderna's pipeline because it's an interesting pipeline. Bear with me for just a second. All right.

This is Moderna's pipeline as it stands right now. Obviously, the lead candidate, the one everyone's excited about is mRNA-1273, the COVID-19 vaccine that we've been talking about. It is Moderna's only pipeline candidate that's in late-stage or phase 3 testing and is now being commercialized. The phase 3 testing, by the way, is still ongoing as they continue to do studies.

It is definitely their lead candidate, but if you'll look right underneath there, there's mRNA-1647. This is cytomegalovirus or CMV, which is a lot easier to say [LAUGHTER] It's a CMV vaccine. It's in phase 2 testing and Moderna is expecting to advance this vaccine into late-stage testing this year, so going into phase 3 testing this year.

Well, this vaccine actually has significant potential. CMV is the leading cause of birth defects in the United States. I think up to maybe around 12 percent of babies with CMV end up dying before they reach the age of one-year-old. There's a real need here. There are no approved vaccines whatsoever for CMV right now.

Moderna has this candidate that's soon to advance into late-stage testing. They really think that this is going to be another example of maybe some imprecise precision, Corinne, but they think that they can potentially make up to $5 billion annually off this vaccine, but they think they can at least make around two billion. That's a pretty wide range. But still, you're looking at a legitimate contender to be a mega-blockbuster here with several billion dollars annually from this vaccine. It's by far their next best candidate that's potentially on the way.

I'm going to scroll on down for a second. That's phase 2. Let's go on down.

If you look here, actually, there are several other candidates in Moderna's pipeline that are in phase 2 testing. You have this personalized cancer vaccine, mRNA-4157. If you look over on the right side, it shows that they're doing a 50/50 profit-sharing with Merck (MRK 1.08%). They're partnering with Merck on this particular program, but this one has a lot of potential as well.

What they're doing is they run the genomic sequencing of a tumor in a person to determine which -- what's called neoantigens -- in that tumor are the best candidates for them to program mRNA to put into the body to create proteins that then cause the body's immune system to attack that particular type of cancer more effectively. It's a really novel strategy that has a lot of potential. Again, it's still in phase 2 testing, way too early to know for sure if it's going to pan out, but a lot of opportunities there. 

Obviously, Moderna wouldn't make as much money off of it because they're doing this profit-sharing split with Merck, but a real promising candidate.

Go on down to this one, mRNA-2416, Moderna owns the rights to this particular candidate. It's targeting cancer as well, particularly looking at ovarian cancer. Then, going on down another pipeline candidate that's in phase two testing is AZD8601. This one has been out-licensed to AstraZeneca (AZN 1.24%). Moderna wouldn't make as much money off this particular candidate if it's successful, but they would receive milestone payments for hitting certain milestones, for example, regulatory approval. They would get royalties on any sales if it ultimately wins approval.

And it's targeting coronary artery disease. What it does is it helps cause the body to produce this VEGF-A protein that can spur the body to create more blood vessels, more arteries. Again, that's a lot of potential there, but those are the phase 2 programs that Moderna has.

But then, look at the phase 1. We're not going to go through these individually, Corinne, but there are multiple antiviral vaccines that Moderna has in phase 1 testing. There's the H7N9 influenza vaccine there you see at the bottom there. They have, come on down, they have some other cancer vaccines that are in early stage testing as well, and then, a lot of programs in pre-clinical testing.

Some of these are brand new, by the way. Moderna recently rolled out their new programs targeting the seasonal flu, targeting HIV, and also targeting the Nipah virus. The company is continuing to beef up this pipeline. Their CEO said that the money they make from their COVID vaccine, they're planning to plow back into expanding the pipeline. He said that he could foresee them getting close to 50 programs in clinical development. They currently have a little over a dozen in clinical development.

Corinne Cardina: Not bad for a 10-year old company.

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