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Why Moderna Stock Jumped Today

By Joe Tenebruso - Jun 21, 2021 at 4:38PM

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The biotech is ramping up production of its life-saving coronavirus vaccine.

What happened

Shares of Moderna (MRNA 3.27%) climbed 4.5% on Monday. The drugmaker is increasing its manufacturing capabilities at one of its U.S. plants to meet the rising demand for its COVID-19 vaccine, according to The Wall Street Journal

So what 

Moderna is adding two new production lines at its facility near Boston. One line could be ready as soon as this fall. The other is expected to be brought online early next year. Together, they're expected to boost the plant's production capacity by as much as 50%.

A syringe is in a drug vial that's next to other drug vials.

Image source: Getty Images.

Moderna is also bolstering its manufacturing and distribution abilities in international markets. The biotech hopes to be able to produce as many as 3 billion coronavirus vaccine doses in 2022, up from roughly 1 billion doses in 2021. 

Now what 

Although some analysts have predicted that Moderna's COVID-19 vaccine revenue will decline sharply as the pandemic subsides, the company's leadership appears to be preparing for sustained demand for its drug. This is likely to be a prudent move, as new variants could create a vital need for booster shots. It's possible that people might require booster doses on an annual basis to remain protected from emerging coronavirus strains. This, in turn, could produce a steady stream of recurring revenue and profits for Moderna -- and perhaps at a greater scale than many investors currently expect.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

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