Shares of Moderna (NASDAQ:MRNA) soared on Friday as fears surrounding a worrisome new coronavirus variant spread among investors. By the close of the holiday-shortened trading day, the biotech's stock price was up more than 20%.
Global stock markets plunged on Friday following reports of a heavily mutated variant known as B.1.1.529 that was first detected in South Africa. Health officials don't yet know if currently available vaccines will be effective against it. The large number of mutations have also sparked concerns that the new variant could be highly transmissible and better able to evade the immune system's defenses.
Many stocks across a wide range of industries fell sharply on the news. However, investors bid up the shares of Moderna and fellow COVID-19 vaccine maker Pfizer in hopes that the drugmakers would be able to develop a drug that could offer protection against the new variant, if needed.
If Moderna's current vaccine is shown to defend against the new coronavirus strain, demand for the drug could rise as more people seek its protection. If, on the other hand, Moderna's existing vaccine is not effective against the new variant, the drugmaker could find itself in a position to develop a new drug that it could potentially sell in addition to its current vaccine. Both of these scenarios would bode well for Moderna's sales and profit growth, which is likely why its stock rose sharply today.