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Why Moderna Stock Is Rebounding Today

By Keith Speights – Oct 7, 2021 at 11:33AM

Key Points

  • Finland halted the use of Moderna's vaccine in younger men.
  • The company's new facility in Africa could help it ease tensions with the White House.
  • Investors are also cautiously optimistic about Moderna's ongoing patent litigation.

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The company plans to build a new manufacturing facility in Africa.

What happened

Shares of Moderna (MRNA 3.17%) were rebounding somewhat on Thursday after several days of declines. The stock was up 4.6% as of 10:59 a.m. EDT today.

Moderna actually had more bad news today. Finland joined Denmark and Sweden in pausing the use of the company's COVID-19 vaccine for some individuals due to concerns about a rare heart inflammation issue. Finland's pause applies to men under age 30, the demographic with the highest risk for the cardiovascular problems.

However, Moderna also announced plans to build a new facility in Africa that will be able to produce up to 500 million doses of its messenger RNA (mRNA) vaccine each year.

In addition, the company's appeal to a Federal Circuit Court to invalidate two of Arbutus Biopharma's (ABUS -0.85%) patents is underway. Some investors appear to be cautiously optimistic about Moderna's chances with this case, although the most likely outcome is a settlement.

A healthcare professional giving a shot to a person.

Image source: Getty Images.

So what

Why would the news about the African manufacturing facility and the federal court appeal have a bigger impact on the vaccine stock than Finland's pause of giving Moderna's vaccine to young men? Politics seems to be a likely factor with the former matter.

Politico reported earlier today that Moderna has been at odds with the Biden administration over producing more doses for use internationally. So the company's announcement about its plans to build the facility in Africa could help reduce the tensions with the White House. 

As for the federal case, anything that emerges from the hearing that indicates a scenario where Moderna would pay less to Arbutus could be a positive sign for the biotech.

Now what

Moderna didn't provide any details about when construction would begin for its facility in Africa. The company also stated that it "expects to begin a process for country and site selection soon." That might not be enough to satisfy U.S. government officials.

Again, the odds seem stacked against Moderna in the patent case. However, the company could reach a settlement with Arbutus that investors like.

As for the heart inflammation issues, so far only Scandinavian countries have paused the use of Moderna's vaccine for some groups. If more nations follow suit, this could become a bigger problem for the company.

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

Stocks Mentioned

Moderna Stock Quote
$181.48 (3.17%) $5.57
Arbutus Biopharma Stock Quote
Arbutus Biopharma
$2.33 (-0.85%) $0.02

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

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