Moderna (MRNA 1.69%) shares climbed more than 2% yesterday after the company took a big step toward handling one of the world's biggest coronavirus challenges: protecting populations against new variants.
The biotech company said its booster candidate targeting the original coronavirus and the omicron variant showed "superior" performance against omicron. Current vaccines are less efficacious against omicron than they are against the original virus and even other variants. And studies show protection against omicron wanes quickly, so Moderna's news could be a game changer. Let's take a closer look at where Moderna stands today -- and the company's prospects considering this new element.
Increases in revenue and profit
There's been reason to be positive about Moderna ever since the company brought its vaccine to market. Moderna has reported billions of dollars in revenue and profit.
MRNA Revenue (Annual) data by YCharts
In the most recent quarter, those metrics came in at $6.1 billion and $3.7 billion, respectively. And that has helped Moderna build up $19.3 billion in cash. This is key because it will help the company bring other programs through the pipeline -- and even potentially grow through acquisitions.
Outside of the coronavirus and flu programs, Moderna has two candidates in phase 3 trials -- vaccine candidates for respiratory syncytial virus and cytomegalovirus. Both represent blockbuster opportunities. Considering the depth of Moderna's pipeline and its cash level, it's unlikely the company will rely on its coronavirus program for the long term.
But it's also unlikely coronavirus vaccine revenue will disappear. Experts say the coronavirus will stick around. And at least the most at-risk individuals will need annual boosters. This brings me back to Moderna's latest news. Moderna's candidate, mRNA-1273.214, demonstrated an eightfold increase in a level of antibody response against omicron one month after vaccination. This performance topped that of Moderna's current coronavirus vaccine.
The company aims to bring mRNA-1273.214 to market as a fall booster. Moderna is now submitting initial data to regulators. And the goal is to make the candidate available by the end of the summer.
Pfizer (PFE 0.55%), too, is working on a candidate that would offer better protection against omicron while still protecting against the original coronavirus. During the most recent earnings call, Pfizer said its studies were "very advanced." Pfizer already dominates the U.S. market. It's fully vaccinated more than 127 million individuals. Moderna has vaccinated 77 million. The big pharma has the resources to quickly roll out a booster and dominate here, too -- and this could happen.
But Pfizer hasn't released data from an updated candidate yet. So Moderna may have an opportunity to beat its bigger rival to market. And that could offer Moderna a position of strength.
The regulatory picture
How do things look from the regulatory angle? Moderna's data came through at the perfect moment. A U.S. Food and Drug Administration (FDA) advisory committee plans to meet on June 28 to discuss whether vaccines should be updated with the latest strains -- omicron, for instance -- for the fall campaign. Moderna's strong data could encourage regulators to opt for vaccine updates. And if that happens, demand for Moderna's eventual booster may be quite strong.
All of this means Moderna's already bright prospects -- the idea of delivering annual boosters -- today look even better. A booster specifically designed to target the latest variant could spur new orders down the road. And it could also prompt a larger share of the population to go for a shot. Another positive: Moderna is holding true to its promises. Earlier this year, the company said it would quickly update booster candidates to target the latest strains. It's showing that it can successfully do this.
Is Moderna a buy after this news? Yes. The shares are trading at only 5.3 times forward earnings estimates. That's compared to more than nine earlier this year. And this latest news could indicate more revenue growth ahead. Today's price looks like a bargain considering booster prospects -- and the long-term outlook for this biotech company.
