There's no doubt about it: Moderna (MRNA 0.29%) today is a leader in the coronavirus vaccine market. The biotech company soared past expectations when it reported $6.1 billion in revenue and $3.7 billion in profit in the first quarter.
Moderna also reiterated its expectation for $21 billion in vaccine sales this year. That's higher than last-year's $17.6 billion.
Of course, this doesn't tell us much about what will happen after the coronavirus crisis truly eases. But Moderna's given us some clues, and they look positive. In fact, they indicate Moderna could dominate the vaccine market over time.
That's important because experts predict the coronavirus will stick around -- and that means people will need protection. Let's check out why Moderna could stay on top.
Vaccine development usually is a lengthy process -- a matter of several years to bring a candidate from the drawing board to commercialization. Even Moderna wasn't speedy from the start. The company worked on its mRNA technology for about a decade before the coronavirus pandemic hit, but that effort has paid off.
The progress made during that time equals speed today and into the future because Moderna scientists can rapidly produce mRNA in a lab. Moderna uses mRNA to instruct the body to make copies of certain viral proteins. Then the body learns to recognize these proteins when the real virus comes along. In traditional vaccine production, scientists grow viral material -- and that's a slow process.
Moderna has already demonstrated its speed. As of the end of the second quarter, it will have brought three candidates from the launch of clinical studies to phase 3 in about one year. That includes the coronavirus vaccine, a respiratory syncytial virus (RSV) vaccine candidate now in phase 3, and a flu vaccine candidate set to enter phase 3.
This could help Moderna enter markets more quickly than its rivals, whether updating its coronavirus booster with the latest strains or commercializing a new vaccine such as one for the flu. It also means the return on Moderna's investments will happen sooner rather than later.
2. Cash and infrastructure
The sales of Moderna's coronavirus vaccine have helped the company build up an enormous level of cash. The company now has $19.3 billion in cash and equivalents, so Moderna can fund its in-house programs -- and make outside investments, if necessary. During this week's earnings call, CEO Stéphane Bancel said Moderna would be "very happy to buy the right company" -- one that represents an opportunity to drive revenue growth.
Moderna also has the infrastructure needed to advance its pipeline. All of the company's mRNA vaccine candidates use the same mRNA chemistry and lipid nanoparticle formulation as the coronavirus vaccine. The nanoparticles are used to deliver mRNA into the body.
And all of these candidates use the same manufacturing platform, too. Moderna hasn't finished ramping up manufacturing. The company this year expects to spend $0.6 billion to $0.8 billion as it further scales up its global infrastructure.
Moderna's candidates -- and future vaccines -- will benefit. These points will streamline future production of candidates for clinical trials and vaccines once they reach commercialization.
What could the future coronavirus vaccine market look like?
And here's more good news: The market could be significant.
Moderna expects to vaccinate at least the most at-risk individuals on an annual basis. The company estimates that includes about 1.7 billion people worldwide. Of course, some of those individuals may choose a vaccine from another company or may not opt for vaccination. But even if only half of them go for a vaccine, that represents 850 million vaccine doses.
The pricing for Moderna's vaccine has ranged from about $15 to $37 a dose. And Moderna says it's likely to charge more once it sells the product directly to pharmacies instead of governments.
All of this indicates the coronavirus vaccine or booster may continue to be a blockbuster product for Moderna for quite some time. That means Moderna isn't just a pandemic stock, but one you can hold onto for the long term.