What happened

Shares of the messenger RNA (mRNA) drug and vaccine developer Moderna (MRNA -2.33%) slipped by a noteworthy 10.7% during the month of October, according to data from S&P Global Market Intelligence. Moderna's stock fell by double digits in response to strong pivotal-stage trial results for Merck's (MRK 0.79%) oral COVID-19 medication known as molnupiravir

Some individuals are dead set against using mRNA vaccines for personal reasons. An oral medication, in turn, might be an appealing alternative to this sizable portion of the market. Now, this news arguably shouldn't have affected Moderna's stock in the manner that it did last month. These folks, after all, were probably never going to be vaxxed with Moderna's product under any circumstances. But Mr. Market still took the development of a viable oral therapy as a bad omen for Moderna's near-term outlook. 

An image of a strand of RNA wrapping around the novel coronavirus.

Image source: Getty Images.

So what

Investors may have also backed away from this large-cap biotech stock last month in anticipation of a less-than-stellar third-quarter earnings report. Underscoring this point, Moderna did indeed post underwhelming third-quarter fiscal results on Nov. 4.

Most worrisome, the company announced during this latest quarterly financial update that its 2021 annual revenue haul will likely fall short of its prior forecast by between $2 billion to perhaps $5 billion. Supply chain issues and a growing market share for the rival COVID vaccine from Pfizer (PFE 0.32%) and BioNTech (BNTX -2.13%)  are clearly hurting the biotech's top line in recent months.

Keeping with this theme, Pfizer recently reported that its COVID vaccine grew its share of the U.S. and E.U. markets by double digits over the course of April to the end of October of this year. 

Now what

Is Moderna's stock a buy on this weakness? Since Oct. 1, the biotech's shares have plunged by over 30% due to concerns about the commercial longevity of its COVID vaccine. So, to regain the market's confidence, the company is probably going to have to buy an additional source of revenue. Unfortunately, there are no obvious revenue-generating acquisition targets that would make a logical fit with the company's core area of expertise.

And while Moderna has been rumored to be considering an acquisition in the intriguing gene-editing arena, none of those companies would provide an immediate boost to its near-term outlook. As such, it might be best to watch this story unfold from the sidelines for now.