Moderna (MRNA 3.28%) took center stage when it launched its coronavirus vaccine about a year and a half ago. It then went on to vaccinate a good deal of the world's population. However, investors' attention has since drifted from this biotech company. But Moderna may be on its way back to the limelight.
That's because Moderna is readying a booster candidate to address the omicron variant. And it's aiming to bring that potential product to market for the fall vaccination campaign. But before Moderna gets closer to its goal, let's check out one green flag for the company's fall vaccine plan -- and one red flag.
The green flag: A booster that works
Moderna recently reported that its booster candidate offers "superior" performance against the omicron variant. The vaccine lifted a measure of neutralizing antibody activity eight-fold one month after vaccination, trial data show. This means the booster candidate handles the omicron variant even better than Moderna's coronavirus vaccine. And the candidate also protects against the original coronavirus. Moderna said this potential product is effective against omicron subvariants BA.4 and BA.5 too.
The biotech company is submitting the data to the U.S. Food and Drug Administration (FDA) for consideration. An FDA advisory committee is set to meet on June 28 to discuss whether it's necessary to update current vaccines for fall to target new strains -- or just stick with those original vaccines. Strong data from Moderna could weigh in favor of an update. This would be excellent news for the company. That's because Moderna appears to be closest to the finish line compared to rivals. Pfizer, too, is working on an updated shot -- but the big pharma player hasn't yet released data.
The red flag: A sign of weakness
The red flag has to do with the booster candidate's performance against subvariants BA.4 and BA.5. Yes, the candidate does offer protection. But performance isn't as strong as when dealing with the main omicron variant. Moderna's study showed that a measure of neutralizing antibody levels came in three-fold lower against the subvariants -- that's compared to performance against omicron.
So, the candidate still is efficacious. But this weakness is something to watch for two reasons. First, it could be a problem if a rival -- such as Pfizer -- produces a candidate with stronger performance against subvariants. That could lead to that rival taking market share. Second, it could be a problem if other subvariants emerge -- and the booster candidate's performance weakens further.
What does this mean for Moderna and investors?
Right now, I would follow the green flag instead of the red one. Moderna's booster candidate data, overall, look strong. It's not too surprising that performance weakens when faced with a subvariant. Changes to the structure of the virus are the reason companies must be ready to update vaccines at a certain point.
It's important for investors to follow the evolution of subvariants -- and the booster's performance against them. If Moderna is able to quickly update boosters as needed, a decline in booster efficacy won't be a significant problem. But if the company falls behind, demand will suffer. And that eventually could affect earnings.
So far, though, the vaccine picture looks bright for Moderna. The company's approved coronavirus vaccine is managing against the original virus and variants. And if the FDA gives the nod to the idea of updating vaccines, Moderna could be on its way to dominating the market this fall.
