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Could Moderna Stock Help You Retire a Millionaire?

By Adria Cimino – Oct 24, 2021 at 6:00AM

Key Points

  • Moderna predicts $20 billion in coronavirus vaccine sales this year.
  • The company is expanding its offerings in the coronavirus space as it works on potential boosters and a next-generation vaccine candidate.
  • Programs in cytomegalovirus and HIV, if successful, could result in game-changing products.

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More blockbusters may be in Moderna's future.

Moderna (MRNA 0.09%) has helped many investors get rich over the past year. The biotech soared more than 400% in 2020. That's after it brought its coronavirus vaccine project from the drawing board to commercialization in a matter of months. Gains have continued this year. And for good reason. The coronavirus vaccine made Moderna profitable after only one full quarter of sales -- and profit topped $1 billion.

The coronavirus vaccine giant predicts $20 billion in vaccine sales this year. And next year's orders and options total about the same. All looks good for more short-term growth in this stock. But what about farther down the road? Could Moderna shares actually help you retire a millionaire? Let's find out.

An investor sitting in an office smiles while looking at his phone.

Image source: Getty Images.

From pandemic to endemic?

First, let's talk about the coming year or so. Right now, U.S. coronavirus cases are on the decline. But cases in other areas -- such as Europe -- are rising again. We don't yet know when the coronavirus may transition from pandemic to endemic. Once the virus is endemic, it will be around on a regular basis -- but won't attain the same massive rates of infection worldwide all at once. In any case, experts have predicted the coronavirus will stick around. And that means we'll need vaccination.

If countries aim to protect their populations, they will have to order vaccines. So Moderna's coronavirus vaccine could remain a billion-dollar product for quite some time. Meanwhile, Moderna is expanding its coronavirus offerings. The U.S. Food and Drug Administration this month authorized Moderna's half-dose booster.

And Moderna is testing three strain-specific booster candidates in phase 2 trials and a next-generation COVID-19 vaccine candidate in phase 1. The company also is conducting preclinical tests on a combined coronavirus/flu vaccine candidate.

These programs may not make it to market during the pandemic. But they could ensure Moderna more coronavirus program revenue in the years to come. At that point, countries will be looking for a fine-tuned product: such as a combined vaccine or one targeting variants. And as we can see, Moderna has a lot going on in that department.

Beyond the coronavirus program

Looking beyond the coronavirus program, Moderna has many other possibilities for revenue and share growth in the future. Certain could be gamechangers and bring in billions. I'm thinking specifically of the company's cytomegalovirus (CMV) and HIV vaccine programs. Moderna expects to launch a phase 3 trial of its investigational CMV vaccine this year. A potential product could bring in between $2 billion and $5 billion annually, Moderna predicts. CMV is a common virus that is most dangerous for unborn babies and people with weakened immune systems.

HIV has been elusive for vaccine developers. But Moderna hopes to score a win with its mRNA technology. Moderna uses mRNA to instruct the body to produce proteins to prevent or treat disease. If Moderna's efforts in HIV are successful, it could be a gamechanger. Moderna aims to launch phase 1 trials for two HIV vaccine candidates this year.

The biotech company's coronavirus vaccine has demonstrated mRNA technology works. So, there's reason to be optimistic that Moderna may bring other mRNA products to market in the coming years.

It's true that Moderna's shares have soared since it entered the coronavirus vaccine race. But revenue and profit have followed.

MRNA Net Income (Quarterly) Chart

MRNA Net Income (Quarterly) data by YCharts

And other measures of financial health such as return on invested capital, free cash flow, and cash levels are reason to be positive about the company's future.

MRNA Free Cash Flow Chart

MRNA Free Cash Flow data by YCharts

A long-term investment

These financial measures along with Moderna's pipeline of 37 programs make it a good choice for a long-term investment.

So, can Moderna help you retire a millionaire? It depends on your investment horizon. Moderna shares may not continue to gain at the current pace forever. But over time, sales of coronavirus products, advancement of candidates through the pipeline, and potentially commercialization of other products likely will lead the shares higher. Of course, as with any biotech stock, the risk is failure of a candidate in clinical trials -- or a drop in sales of a blockbuster product. Investing always involves some degree of risk.

But, overall, the future looks bright for Moderna. So, if you buy Moderna now and hold for a number of years, I expect this biotech stock could help you on your quest to wealth.

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

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