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Could Moderna Make a Fortune With a COVID Vaccine for Kids?

By Keith Speights and Brian Orelli, PhD - Mar 26, 2021 at 7:01AM

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The biotech could have a big opportunity.

Moderna (MRNA -4.97%) recently announced that it's testing COVID-19 vaccine mRNA-1273 in children between the ages of 6 months and 12 years. The biotech has already been conducting clinical studies evaluating its vaccine in teens. In this Motley Fool Live video recorded on March 17, 2021, Motley Fool contributors Keith Speights and Brian Orelli talk about how significant of a catalyst Moderna's COVID vaccine for kids might be and answer viewer questions about the biotech stock.

Keith Speights: So could expansion to the pediatric population provide a significant catalyst to Moderna?

Brian Orelli: I think the teenager population offers some potential. Younger children is obviously much larger, because we're talking about 6 months to 11 years for the younger population versus 12 to 17, so just the number of years we're talking about 11 versus, what's that -- five or six or something? All children total under 18 make up about 22% of the population, so this is a huge opportunity in the two age brackets combined and even the teens is a third of that is still whatever, 7%, 8% of the population. So it can offer a nice boost to Moderna.

It's going to be dependent on when they get the authorization and then also how much COVID-19 is around when they get the authorization. So if COVID-19 is sort of not that big of a deal, in the sense of a nuisance on the level of the flu, maybe a lot of kids don't get it, just like a lot of kids also don't get the flu vaccine.

Speights: Right. While we're talking about Moderna, Brian, we do have a couple of viewer questions on the stock. So let's get to those very quickly. Rochi asked, "Thoughts on MRNA, Moderna?" and another viewer asks, "Any thoughts on booster shots for the future?"

Orelli: Booster shots, I'm going to go with a definite buy if we're doing a buy, sell, or hold. On Moderna, I'm hold to sell mostly on valuation and my inability to evaluate. So I'd put it as a hold because my biggest issue is I don't know how to evaluate the valuation on Moderna. It's either really cheap or really expensive depending on how long we're having to get COVID-19 booster shots.

If we're having to get them a year or two, then maybe its value doesn't look so great. If we're having to get them for the rest of our lives, now the valuation looks reasonable and they certainly have a well-stocked pipeline. The cash from the COVID-19 vaccines can fund that and then they don't have to raise any additional capital. So I think that it's in the too hard, in my opinion, it's in the too hard to value pile, so I'll put it as a hold.

Speights: You and I have talked about this before, Brian. This is a stock that will probably be highly volatile at least over the next year or two years. Part of the issue for Moderna will be, what's the ongoing demand for COVID-19 vaccines? That's still a big question mark. I think if that question is answered to their favor, the stock should have plenty of room to run over the next year or two.

I think the real way to look at Moderna is a long-term play. I mean, look at their pipeline; look at their potential for their mRNA technology. Over the long run, it could be a winner, but probably over the short-term, highly volatile.

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