It's good to dream big. That's exactly what Moderna (MRNA -1.39%) is doing. CEO Stephane Bancel raised eyebrows in November 2020 by stating in an interview with Endpoints News, "We could end up being three, four years from now the biggest vaccine company in the world."
When Bancel made that statement, Moderna's market cap stood below $39 billion. Today, the company's market cap tops $94 billion. That's not nearly enough to make Moderna the biggest vaccine company in the world. However, the company just took a big step toward dominating the vaccine market.
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The first step on an important path
Moderna announced last week that the first participants had been dosed in a phase 1/2 study evaluating the company's quadrivalent seasonal influenza vaccine candidate mRNA-1010. That might not seem like a big deal, considering that several safe and effective flu vaccines are already on the market.
However, current flu vaccines are only around 40% to 60% effective. Also, egg-based vaccines (which includes the majority of currently approved flu vaccines) can sometimes cause adverse reactions. Moderna's mRNA approach could increase efficacy. Its mRNA vaccine could also potentially have fewer side effects than current flu vaccines.
The opportunity in the flu vaccine market is significant. Around 8% of people in the U.S. get the flu each year with an estimated economic burden totaling $11 billion annually. Worldwide, between 3 million and 5 billion severe cases of flu occur each year with 290,000 to 650,000 related deaths.
There's an even bigger reason why the early-stage clinical testing of Moderna's flu vaccine candidate is the first step on an important path, though. The development of an mRNA flu vaccine is critical for Moderna to fulfill its vision of launching combination respiratory vaccines.
Why combos could be king
Moderna has indicated in the past that it planned to develop a combination COVID-19/flu vaccine. The company now says that it hopes to create a triple-combo mRNA vaccine for adults and elderly individuals targeting COVID-19, flu, and respiratory syncytial virus (RSV).
Bancel stated in a press release last week, "Our vision is to develop an mRNA combination vaccine so that people can get one shot each fall for high efficacy protection against the most problematic respiratory viruses." That could be a winning strategy if Moderna can make it happen.
Vaccination rates aren't as high as health experts would like for flu or COVID-19. During the 2019-2020 flu season, less than half of adults in the U.S. received a flu vaccine. So far, a little under 60% of American adults have been fully vaccinated for COVID-19.
Combining the COVID-19 and flu vaccines could help increase vaccination rates in the future. It should also be more cost-effective than having two separate vaccines.
There currently aren't any approved RSV vaccines. However, Moderna has already advanced an experimental mRNA RSV vaccine into phase 1 clinical testing. It announced positive interim data from this study in younger adults ages 18 to 49 earlier this year.
Don't crown Moderna just yet
Moderna isn't the biggest vaccine company nor is it dominating the global vaccine market yet, though. Even with the phenomenal success of its COVID-19 vaccine, Pfizer and BioNTech have racked up bigger sales for their vaccine.
It's also still really early for Moderna's efforts outside of COVID-19. There's no guarantee that the company's clinical studies for its flu and RSV vaccine candidates will pan out.
Keep in mind too that other companies are pursuing a similar strategy as Moderna. Novavax is arguably the leader in the race to develop a combo COVID-19/flu vaccine. The biotech has reported positive late-stage results for its COVID-19 and flu vaccine candidates. Novavax hopes to soon file for emergency use authorizations for its COVID-19 vaccine.
However, Moderna just might emerge as the biggest winner among the top vaccine stocks over the long run. If it does, the company's advancement of a flu vaccine candidate into clinical testing will likely be viewed in retrospect as one of the most important milestones in its quest to dominate the vaccine market.
