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Why Moderna Stock Is Dropping This Week

By Keith Speights – Jan 7, 2022 at 12:51AM

Key Points

  • COVID-19 cases are rising due to the omicron variant.
  • While omicron is highly contagious, it appears to be milder than previous strains.
  • Investors seem to be anticipating that the COVID-19 outlook will improve, which could mean lower demand for COVID-19 vaccines.

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Investors seem to be increasingly pessimistic about future demand for Moderna's COVID-19 vaccine.

What happened

Shares of Moderna (MRNA 4.16%) were dropping 15.2% this week as of market close on Thursday, based on data from S&P Global Market Intelligence. The only news from the company in recent days were announcements about participation in two healthcare conferences and the dosing of the first patient in the phase 1 study of its Epstein-Barr Virus (EBV) vaccine candidate. 

Did these announcements cause the vaccine stock to fall? No. Instead, the primary issue for Moderna right now is that investors appear to be increasingly pessimistic about future demand for COVID-19 vaccines. 

A healthcare professional giving a shot to a patient.

Image source: Getty Images.

So what

It might seem counterintuitive that investors would be more negative about vaccine demand at a time when COVID-19 cases are increasing due to the coronavirus omicron variant. However, the data so far appears to show that while omicron is highly transmissible, it's milder than previous strains. This combination could lead to a much more promising environment with respect to COVID-19 over the long run. And that just might translate to lower demand for Moderna's COVID-19 vaccine.

But it's still too early to predict with any level of confidence that COVID-19 vaccine demand will decline significantly. The dynamics of the market could change quickly.

Now what

Moderna could provide some hints as to what it expects the demand for its COVID-19 vaccine will be at the upcoming J.P. Morgan healthcare conference. CEO Stéphane Bancel is scheduled to present an update at the virtual conference on Jan. 10.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Keith Speights 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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