Moderna (MRNA -2.45%) has been among the first to address the biggest challenge facing coronavirus vaccines right now: new variants of concern. These strains put the effectiveness of current vaccines -- including Moderna's -- in jeopardy. And variants are gaining ground worldwide. Moderna recently said it's exploring three ways of handling the problem: an additional dose of the current vaccine; a strain-specific booster; and a shot that combines Moderna's authorized vaccine with a strain-specific booster.
Rivals have launched similar efforts. But according to Moderna CEO Stephane Bancel, three things set Moderna apart from others in this race to handle an evolving virus. Here's what he had to say during the company's recent earnings call.
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Speed, flexibility, and scale
"It's a new and still unstable virus," Bancel said. "Speed to market, and flexibility of product mix, and scale will be critical. We have all three. Few companies do."
Here's why Bancel says these points are particularly important: because we don't yet know which combination of vaccine products will best defeat emerging strains.
Let's take a look at Moderna's performance when it comes to each point. First is the idea of speed. Moderna's vaccine is an mRNA vaccine -- that's translated into speed of development and production from the start. An mRNA vaccine doesn't involve the use of weakened virus like a traditional vaccine, so Moderna doesn't have to make weakened pathogen; this saves time. Scientists can quickly produce mRNA in a lab. As a result, Moderna could make a booster or updated vaccine more quickly than a company using traditional vaccine development methods.
As for flexibility, mRNA offers an advantage here too. Moderna can produce a variety of mRNA-based products in one room -- with the same equipment. With the growth of new variants, it's likely Moderna soon will have to manufacture the original vaccine along with at least one other product -- such as a booster. The ability to do all of this in the same place and with the same equipment should lower costs. And it clearly would help Moderna reach production goals.
Manufacturing and sales
Now let's talk about Bancel's final point: scale. Moderna is scaling up in various areas, but I'll focus on manufacturing and sales. The company recently increased the low end of its production forecast for this year to 700 million doses; that's up from 600 million. Moderna originally set the low end at 500 million doses. And it's possible the company may produce as many as 1 billion doses this year.
Moderna is investing in more equipment, adding workers, and buying more raw materials as it continues ramping up operations. The goal next year is to produce enough volume for 1.4 billion doses (at the current dosage). But the company may have the capacity to distribute 2 billion doses if potential boosters require lower dosages than the current vaccine.
The scale-up of Moderna's commercial network should allow it to more easily grow vaccine sales worldwide. Progress includes the establishment of subsidiaries or partners in eight countries including Canada, the U.K., and Japan.
Is Bancel right?
Is Bancel right about these elements being crucial? Yes. In a matter of weeks, variants of concern can pick up steam and become dominant in some areas. That's what happened with the U.K. variant in the U.K. and the South African variant in South Africa. So speed to market is essential when it comes to producing boosters or vaccine updates. And the flexibility and scale elements will help vaccine makers actually get the vaccine to where it belongs: in people's arms.
Bancel is also right when he says Moderna has all three of these elements. That's a big advantage right now, as vaccine rollout picks up pace. And it will continue to be key in the future. Of course, the coronavirus vaccine market remains competitive. If another company produces a more efficacious booster, Moderna could lose market share.
But if Moderna's efforts to handle new strains are equal to or better than those of its rivals, this biotech company will have what it takes to remain on top.
