Shares of the messenger RNA specialist Moderna (NASDAQ:MRNA) were up by a noteworthy 4% as of 12:35 p.m. EDT on Wednesday. While that percentage may not seem like a lot in absolute terms, it actually translates into a whopping $6 billion rise in the biotech's market capitalization.
What's sparking this sizable rally? The Food and Drug Administration is set to review Moderna's request for COVID-19 booster shots for adults this Thursday. Although the agency's scientists said last Tuesday that there wasn't enough evidence to support the need for booster shots at this time, they also didn't completely derail the idea. The details can be found within a 45-page briefing document currently on the FDA's website.
What's important to understand is that a similar scenario unfolded during Pfizer (NYSE:PFE) and BioNTech's (NASDAQ:BNTX) request last month to clear booster shots for certain at-risk Americans. The FDA ultimately approved the duo's booster shot request, although that approval was limited to individuals 65 or older and other vulnerable people. Moderna's shareholders, for their part, seem to think the agency will essentially give the same type of approval for the company's competing mRNA vaccine for the novel coronavirus.
Why are booster shots so important to Moderna? The biotech is still a single-product business. While it has numerous other product candidates making their way through clinical trials, Wall Street and industry insiders widely expect the biotech to be wholly dependent on sales of its COVID vaccine for at least another year. Booster shots, even in a limited capacity, would allow the biotech to maintain a healthy level of revenue for the time being.