Moderna (MRNA -2.52%) has been a stock market favorite ever since it entered the coronavirus vaccine race last year. The stock soared 434% in 2020. And its market cap rose from about $6 billion at the start of last year to $134 billion today. Of course, the stock has stumbled here and there. But it's always managed to recover -- and go on to gain more.

So, what's happening now? Moderna shares have dropped about 12% since the start of the month. Investors worry a new coronavirus pill would result in fewer people opting for vaccination. All of Moderna's product revenue comes from sales of its COVID-19 vaccine. Such a situation could be disastrous in the near term. Now the question is: Should you be worried and avoid Moderna stock -- or is this a buying opportunity?

A person wearing a face mask touches the screen of their phone.

Image source: Getty Images.

Merck's coronavirus pill

First, let's take a look at the news that's hurt Moderna shares in recent days. Merck and partner Ridgeback Biotherapeutics reported that their investigational COVID-19 pill cut risk of hospitalization or death by 50% in a phase 3 trial. The companies plan to apply for emergency authorization as soon as possible.

Those who strictly oppose vaccination probably will continue to oppose it. But I wouldn't expect availability of a coronavirus pill to stop most people from getting vaccinated. Even with such a treatment, it's still possible to become extremely ill.

I expect the coronavirus to follow in the footsteps of the flu. Treatments such as Roche's Tamiflu exist. But that didn't stop 55% of Americans from getting vaccinated last season. The flu kills between 12,000 and 52,000 Americans annually, according to the Centers for Disease Control and Prevention. More than 702,000 Americans have died from COVID-19 since the start of the pandemic. Considering these numbers, I would expect at least all of those individuals who seek flu vaccines each year would also go for a coronavirus shot.

So, I don't think a new pill treatment will destroy demand for vaccines. Does that mean investors' reaction to the Merck news was overdone? Yes. Moderna predicts vaccine revenue of $20 billion this year. And the company has signed supply agreements all the way through 2024. So, we have some evidence Moderna will continue to see significant vaccine revenue at least for a few years.

What happens after 2024?

But what about after 2024? It's too early to say whether coronavirus vaccine sales will remain at a steady level, decline, or grow. Moderna isn't waiting around to find out, though. The company is working on booster candidates to specifically target variants, a next-generation vaccine candidate, and an investigational combination flu/COVID-19 vaccine. One or more of these products may compensate for any declines in the original coronavirus vaccine's revenue.

And there's a lot more to Moderna than the coronavirus program. The company has 37 pipeline programs across several therapeutic areas -- and 22 of them are in the clinical trial stage.

If all goes smoothly, the next non-coronavirus product to market could be a cytomegalovirus vaccine. CMV is a common virus that could be extremely dangerous for those with compromised immune systems. It also represents a danger for those who are pregnant as it can cause devastating birth defects. Currently, a vaccine doesn't exist. Moderna's vaccine candidate is set to enter a phase 3 trial this year. The company predicts its eventual vaccine could generate annual peak sales of $2 billion to $5 billion.

Now, let's look at Moderna's share price. Moderna's stock this week fell below Wall Street's average 12-month share price forecast. And today, the stock is trading at 11 times forward earnings estimates. That's down from more than 16 a couple of months ago. This, of course, doesn't include profit opportunities down the road.

MRNA PE Ratio (Forward) Chart

MRNA PE Ratio (Forward) data by YCharts

Time to buy Moderna?

So, are we looking at a buying opportunity? I think so. Moderna depends on its coronavirus vaccine right now. And that vaccine is bringing in billions. For reasons I mentioned above, it's likely that will continue. But even if vaccine sales decline, Moderna has plenty of exciting programs in the pipeline that merit investors' attention.

We should be ready for some share price volatility, however. The emergence of rival vaccines or treatments may shake investors' confidence along the way. And that means Moderna shares could pull back from time to time. If that makes you nervous, you may be best watching Moderna from the sidelines. But I expect investors to win if they hold onto shares of this biotech company for the long term.