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Can Moderna Become a $200 Billion Company in 2022?

By Adria Cimino – Nov 19, 2021 at 6:00AM

Key Points

  • Moderna almost reached this market value a few months ago.
  • But investors today worry about vaccine sales in the coming years.
  • Moderna is preparing several candidates that may define its presence in a post-pandemic world.

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It may depend on post-pandemic revenue levels.

Moderna (MRNA -4.48%) almost made it to $200 billion in market value this year. The vaccine-giant's shares soared, bringing its market capitalization to a high of $195 billion back in August.

Investors cheered as the company reported billions of dollars in coronavirus-vaccine revenue and sales. But the smiles have turned into frowns in recent weeks amid worries that sales will taper off post-pandemic.

Meanwhile, Moderna has been progressing on clinical trials of strain-specific booster candidates and the development of a potential next-generation COVID-19 vaccine. Now the question is whether booster sales next year and optimism about possible future products could bring the sparkle back to Moderna shares -- and result in a jump in market value next year. Let's take a closer look.

A masked healthcare worker holds up a dose of a vaccine.

Image source: Getty Images.

A booster authorization

Moderna has hit a few roadblocks in recent weeks. The U.S. Food and Drug Administration (FDA) authorized its booster. But as with the Pfizer booster, the FDA only recommended the product for certain people -- . those ages 65 or older or with comorbidities.

Even worse, the FDA has put the brakes on Moderna's plans to vaccinate teens. The agency recently said it needed more time to review Moderna's submission because the FDA is studying international analyses that have shown an increased risk of heart inflammation in some young people following mRNA vaccination.

The FDA told Moderna it may continue its review into January. Considering this, Moderna says it won't file for authorization of its vaccine in kids until the teen review is complete.

At the same time, bigger-rival Pfizer is already vaccinating teens and kids. It won authorization in those groups in May and October, respectively.

I don't see a positive catalyst for Moderna shares in the coming weeks. That said, next year could bring this stock back to the forefront in a positive way. A potential FDA authorization of Moderna's booster in teens, and then in kids, could offer an initial lift to the shares.

Vaccine orders and candidates

But more may be ahead. It's important to keep our eyes on two things: vaccine orders and the development of Moderna's other coronavirus candidates.

First, let's talk about orders. If governments order doses into 2023 or beyond, we can imagine a high level of product revenue will continue. Moderna already has lined up contracts into the future with some countries. For instance, a supply agreement with Canada includes an option for doses through 2024.

It's also possible that, post pandemic, coronavirus vaccines will no longer be ordered by the government. Instead, vaccine makers will sell directly to distributors or pharmacies. This still may result in significant revenue.

Now let's consider Moderna's other COVID-19 candidates. The company's three investigational strain-specific boosters are in phase 2 trials and a next-generation vaccine candidate is in phase 1. Any positive reports from these trials represent catalysts for the stock.

Moderna already has said the future vaccine market will be a booster market. As I mentioned above, Pfizer and Moderna are both selling boosters, but they are extra vaccine doses. Moderna's candidates may represent more of a fine-tuned option -- and that could translate into more people going for a jab.

Finally, non-coronavirus programs may nudge Moderna shares higher next year. For example, the company recently launched a pivotal trial for its cytomegalovirus (CMV) vaccine candidate. The product has blockbuster potential -- and the ability to capture an entire market. So far, a CMV vaccine doesn't exist. CMV is a common virus that can be particularly harmful for unborn babies and individuals with weakened immune systems.

A 112% gain

Let's talk about the share price. To reach $200 billion in market cap next year, Moderna's shares would have to rise 112% from today's share price. Moderna's shares have climbed 124% year to date, and that's after a 434% gain last year. It's entirely possible that Moderna could increase more than 100% next year to reach a $200 billion market value.

That said, investors have become much more cautious about coronavirus-vaccine stocks recently because it still isn't clear exactly how much revenue these products will generate in a post-pandemic world. However, I'm optimistic about Moderna as a long-term investment.

I think vaccine or booster revenue will continue at a satisfactory level. And I like Moderna's pipeline. But it may be difficult for Moderna to reach $200 billion in market value next year -- unless it offers investors clues about coronavirus-vaccine revenue levels to come.

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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