Moderna (MRNA 0.58%) has come a long way in just two years. The biotech company developed one of the leading coronavirus vaccines in about nine months -- and has since made billions of dollars in vaccine revenue and profit. And over that time period, the stock soared more than 1,200%.
Sounds like a biotech success story, right? It is. But every story comes with some bumps along the way. And Moderna may be in that chapter right now. The stock has dropped more than 60% from its peak back in August. And these days Moderna investors may be wondering whether they should stay around for the rest of the story. Of course, the decision depends on each individual's goals and investment horizon. Still, there is one particular thing Moderna investors should avoid in 2022.
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A blockbuster vaccine
It's true Moderna has made a name for itself with the coronavirus vaccine. It's a blockbuster, and today, it's Moderna's only source of product revenue. Investors have focused intently on each update on new contracts signed or doses delivered. And these points are important.
But the one thing long-term investors should avoid in 2022 is basing their Moderna buy/sell decision only on the company's coronavirus vaccine contracts and orders. That's the worst mistake a Moderna investor could make this year. Why? Because it could make an investor overly optimistic or pessimistic, without looking at the big picture. And the big picture is the rest of Moderna's programs -- all 40 of them.
The coronavirus vaccine is the product for Moderna right now. And it may continue to be for quite a while. Experts predict the pandemic will shift to an endemic -- and some say this may happen as soon as this year. Infection rates will be lower in that scenario, but the virus still will be around. And people will need vaccination. So, it's unlikely vaccine sales will plummet. But we don't yet know if they'll continue growing.
In any case, these days, it's important for investors to look beyond Moderna's coronavirus vaccine to see which other candidates may represent revenue in the coming years. And here, things look promising.
Moderna didn't get too much attention for a key announcement a few months ago. In October, the company launched a phase 3 pivotal trial of its cytomegalovirus (CMV) vaccine candidate. CMV is a common virus that is particularly dangerous for unborn babies and people with weakened immune systems. Today, a vaccine doesn't exist. Moderna has the opportunity to be first -- or among the first -- to market. The company predicts peak sales of $2 billion to $5 billion. So, this could be another blockbuster in the not-too-distant future.
Beyond the coronavirus program
Outside of the coronavirus program, Moderna has five candidates in phase 2 trials. They cover a variety of areas from a personalized cancer vaccine to a Zika vaccine and a potential therapeutic for heart disorder myocardial ischemia.
All of Moderna's programs -- like its coronavirus vaccine -- use mRNA technology. This involves deploying messenger RNA to instruct the body to produce proteins that fight off or prevent a particular disease. The fact that this method has proven itself in the coronavirus vaccine doesn't mean it will work in every program. But at least we now know it has the ability to work in humans.
Finally, we shouldn't forget that Moderna is preparing for its post-pandemic future. The biotech company is working on a potential product that could spur a big percentage of the population to get an annual vaccine. It's a combined flu/coronavirus vaccine candidate. Rival Novavax is further along in developing a combined candidate -- but there is plenty of room for two players in this market. In the U.S. alone, about half of the population goes for a flu shot annually.
All of this means investors should look at Moderna as more than a coronavirus vaccine company. Moderna may face more volatility in the coming months, as it's very sensitive to coronavirus news these days. But once the health crisis eases, more and more investors may turn their attention to the rest of Moderna's pipeline. If even a few of these programs are successful, Moderna's long-term revenue and profit prospects could be bright. And that may lead to lasting gains over time.
