Please ensure Javascript is enabled for purposes of website accessibility

11 Words From Moderna's President That Could Mean Billions of Dollars in Additional Sales

By Keith Speights - Jun 30, 2021 at 5:52AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

But it remains to be seen if his view is correct.

When Dr. Stephen Hoge speaks, people listen. Hoge is president of Moderna (MRNA -5.06%), a drugmaker that's been one of the biggest winners in the COVID-19 vaccine market. He heads up the company's research and development and has been with Moderna since 2012. 

Last week, the Associated Press talked with Hoge about Moderna's messenger RNA (mRNA) technology platform and what might happen next in the fight against COVID-19. There was one statement that he made that was especially important for investors. These 11 words spoken by Moderna's president could mean billions of dollars for the company.

Word bubble with  picture of bag with dollar sign on it.

Image source: Getty Images.

A $10.4 billion answer

The first question that the AP asked Hoge pertained to whether or not COVID-19 booster shots will be required in the future. He responded: "I believe that there's going to be a chronic booster need."

In his capacity as Moderna's president and overseeing the biotech's research, Hoge should have access to the data needed to form a good opinion on this matter. If his take is right, Moderna is likely in a great position to make billions of additional dollars going forward.

Just how much could the company make if recurring COVID-19 booster shots are needed? We can't know exactly how much, but we can make a pretty good guess.

Moderna has secured supply agreements for 2021 for well over 900 million doses. This total doesn't include commitments to supply vaccine doses for the lowest-income countries. The company set different price tags for each deal, but the average price per dose is around $23 (skewed by an especially low price for the U.S. government, which helped fund the development of Moderna's vaccine.) 

Let's assume that one booster dose will be needed annually and that Moderna can renew its existing supply deals at similar pricing. If this is the case, Moderna could make more than $10.4 billion each year from booster shots. 

A different take

Not everyone agrees with Hoge's view, though. Sara Oliver of the Centers for Disease Control and Prevention (CDC) told an advisory committee last week that data doesn't support the need for COVID-19 booster shots at this point. The CDC would need to see evidence that current vaccines aren't as effective before it would recommend booster shots.

Results from a study published earlier this week in Nature could throw cold water on Hoge's opinion as well. The study's findings appear to indicate that the mRNA vaccines developed by Moderna and Pfizer-BioNTech could provide immunity from COVID-19 for years. 

However, it's possible that new coronavirus variants could change the game. The CDC's presentation last week noted that a "variant of concern substantially impacting vaccine protection" could make booster shots necessary. 

Variants seemed to be at the top of Hoge's mind in his discussion with the AP last week as well. After mentioning that he thinks booster shots will be needed, Hoge immediately talked about Moderna's efforts to develop a variant-specific booster shot.

Hoge's focus on variants isn't surprising. Moderna chief scientific officer Melissa Moore recently warned about rapid coronavirus mutations, stating: "We already know that some of these new strains are less susceptible to neutralization by our current vaccine."

A pivotal question

How long Moderna's vaccine will provide immunity against COVID-19 is a pivotal question for the company. It's also a critical one for investors.

If Moderna won't be able to count on strong recurring revenue from its COVID-19 vaccine, the biotech stock is arguably way overvalued with a market cap of more than $90 billion. On the other hand, if the company stands to make $10 billion or more year in and year out from its COVID-19 vaccine, the opportunities for its pipeline programs combined with this revenue could mean that the stock has even more room to run.

Keith Speights owns shares of Pfizer. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$150.00 (-5.06%) $-8.00
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$48.58 (-1.40%) $0.69
BioNTech SE Stock Quote
BioNTech SE
BNTX
$147.61 (-2.91%) $-4.43

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
394%
 
S&P 500 Returns
127%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.