It's hard to look at Moderna (MRNA 1.55%) without focusing on the company's coronavirus vaccine. That's because the product was almost an instant blockbuster. It brought Moderna more than one billion dollars in sales and profit in its very first full quarter of commercialization. And the billion-dollar sales and profit have continued.
The coronavirus vaccine is Moderna's first commercialized product. So Moderna started its story as a commercial-stage company with a bang. We can't expect every potential product to generate as much revenue as a product used to fight a pandemic. But that doesn't mean blockbuster revenue is over. In fact, the following two charts indicate Moderna is at the beginning of its growth story.
Image source: Getty Images.
A strong pipeline
So let's start by an important point: Moderna has a strong pipeline. The company is actively developing 31 programs. And 19 of them are in clinical studies. These programs cover a variety of areas -- from prophylactic vaccine candidates for HIV to investigational vaccines to fight cancer. And Moderna is developing tomorrow's coronavirus vaccine. It's doing that by testing strain-specific boosters and a combined flu/coronavirus vaccine candidate.
Now, our first chart. It doesn't refer to Moderna only -- but to all companies working on mRNA programs. And on this chart we can see that most mRNA prophylactic vaccines, therapeutic vaccines, and therapeutic candidates are in preclinical and phase 1 development. It will take several years for those candidates -- if successful -- to reach commercialization. So, what this tells us is a huge wave of mRNA products and revenue is not going to happen right now. Instead, it's likely to happen in the early to mid-2030s.
Image source: Statista.
Our next chart corroborates that. In this chart, we can see that mRNA product revenue soared last year with the launch of two mRNA vaccines -- from Moderna and Pfizer. It reached about $50 billion. The chart shows sales figures dropping significantly from today through 2024, then slightly extending declines through the end of the decade. As of 2029, though, revenue is expected to start gaining again.
Image source: Statista.
Here's what's happening
In the chart, the forecasts show a decline in mRNA revenue as need for the coronavirus vaccine declines. The coronavirus vaccines are the only two approved mRNA products on the market today. Since it will take a while for most of today's mRNA candidates to reach commercialization, revenue only starts picking up about seven years from now.
What does this mean for investors in a company like Moderna? I don't expect coronavirus vaccine revenue to drop off a cliff. Moderna aims to sell its vaccine -- or an updated one -- on an annual basis to countries and eventually pharmacies.
Of course, revenue is likely to decline by some degree from its pandemic level. And that might equal a lull in revenue and share price growth. But that's likely to be a temporary situation. Moderna is using today's enormous cash levels to invest in its pipeline. Even a small handful of successful candidates could mean billions for the biotech a few years down the road. And that may equal big rewards for investors who held on for the long haul.
