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Moderna Looks for a Breakout in 2021

By Brian Orelli, PhD and Keith Speights - Mar 10, 2021 at 8:51AM

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But 2022 is likely to be the year that defines the company.

Moderna (MRNA -4.97%) reported lackluster fourth quarter results, but that wasn't a big surprise since its coronavirus vaccine was only authorized by the Food and Drug Administration in December. This year, on the other hand, the biotech is expected to produce at least $18.4 billion in revenue based on currently contracted sales. In this video from Motley Fool Live, recorded on March 1, Contributors Brian Orelli and Keith Speights discuss Moderna's prospects and what it will take for the company to grow into its current valuation.

Brian Orelli: OK. Let's move on to Moderna. They reported fourth-quarter earnings results on Thursday, but it was really guidance that was most important for the vaccine maker. For the record, they recorded $571 million in revenue. Most of that was from BARDA contracts to develop the vaccine because they only started to book sales of the coronavirus vaccine in December. They lost $272 million for the quarter.

While the company was unprofitable in 2020, I'm going to go out on the limb and say, of all the unprofitable companies, Moderna is probably the one that any investor has the least amount to worry about.

On the guidance side, they're planning on manufacturing 700 million doses of the coronavirus vaccine. That's up from previous guidance of 600 million doses this year. They are looking to potentially increase that to 1 billion doses this year. Potential for 1.4 billion doses in 2022, $18.4 billion in anticipated product sales. That's only products that are currently under agreements to be sold. And then they didn't give earnings guidance, which isn't too surprising. Any thoughts on the year ahead? Eighteen billion dollars is a lot of money. You think they can spend it all?

Keith Speights: I have no doubt that Moderna will find some good uses for that money. [laughs].l I think probably the biggest thing to watch there is their CEO has stated publicly that he would like to expand their pipeline to up to 50 clinical programs. Right now I think they have maybe a dozen, 12 or 13 in their pipeline that are in clinical stage. They do have some plans to advance a few of the pre-clinical programs into clinical testing in the not-too-distant future. But I think you'll see a lot of that $18 billion, Brian, go toward beefing up that pipeline, using that mRNA technology to target other viruses, other diseases. I think that's going to be a big focus of this year. The other thing is just even with the steep valuation, and it is pretty steep, I think we're going to see Moderna's quarterly results that are on the way over the next few quarters. I think they could be so good that the stock keeps going up just because they have the numbers just look so fantastic.

Orelli: It's really going to be guidance for 2022 that really determines where the valuation ends up. We're talking $18 billion next year or even $10 billion in 2022, then the valuation totally makes sense to me.

Speights: If they're talking $18 billion again in 2022, Moderna is going to be looking pretty good.

Orelli: Yeah.

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