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COVID Vaccine Stocks: How Strong Is Moderna's Financial Position?

By Keith Speights - Jan 25, 2021 at 6:03AM

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Hint: The answer is a good one.

No matter what business a company is in, its financial position is important. That's true even for high-flying COVID vaccine stocks like Moderna (MRNA -4.97%).

In this Motley Fool Live video recorded on Jan. 13, 2021, Healthcare and Cannabis Bureau Chief Corinne Jurney Cardina and Fool.com writer Keith Speights examined how strong Moderna's financial position is right now and how it could change in 2021. 

Corinne Cardina: Let's talk a little bit about Moderna's financials. As a biotech, it has historically relied on external funding. It just got regulatory approval for its COVID vaccine, so it hasn't made money from selling anything really yet.

It's starting to bring in product revenue with the large contracts that are signed, but what do investors need to know about this transition from relying on things like BARDA funding, relying on partnership revenue? How is Moderna going to make that transition? Do you think they're well-positioned to do that and start acting more like a pharmaceutical company?

Keith Speights: I do think they are well-positioned to make that transition. I wrote an article maybe a few weeks ago, Corinne, that Moderna is one of those companies that is pretty much guaranteed to have ginormous revenue growth in 2021. Guaranteed, right? [inaudible] [LAUGHTER] They've got all the supply agreements in place. The money has a totally [inaudible]. Yeah. This is a virtual slam dunk.

But they're in a strong financial position. I'll share my screen again. We'll take a look at their financials just quickly. I am going to pull up, let's see. Let's go to Yahoo here, Yahoo Finance. If you look at where Moderna is, I'm going to look at the quarterly view rather than the annual view here. I want to drill into their assets for just a second.

Look at how much cash they have. This was, as of the end of September, nearly $3.3 billion. These numbers are in thousands by the way, thousands of dollars that you see. They have cash of nearly $3.3 billion. Look where they were at the end of 2019; 1.1. They've nearly tripled their cash stockpile.

Yeah, a lot of that's thanks to funding from governments and putting some money down to get their supplies and everything but in federal funding. But they have tripled their cash position in less than a year. They're at $3.3 billion in cash.

Now, let's get to look at this current and I want to go over to the income statement, look at this quarterly as well. In their last quarter, let me come down. They lost nearly 234 million. Over the last 12 months, they've lost 532 million. But you can expect Moderna is losing money because they don't have that stable revenue coming in. They haven't had a product on the market until really in just the last month. So losing money is just the name of the game with clinical-stage biotechs.

But Moderna has enough cash right now at that spending level to go a long time. But they are about to make a lot of money, we're talking about, that estimate of $11 billion this year. Moderna is in excellent financial shape and they're going to be, I think you're going to see them be profitable in 2021. I think you're going to see them plow back a lot of money into more research and development.

Who knows? You could even see Moderna, scoop up some, maybe not buy out another company altogether, although they could, but I wouldn't be surprised if they even look at buying some other pipeline assets. This company is about to hit the big time. They're moving on up and we're going to see them like a lot of money this year.

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