A lot can happen in 12 months, as investors can testify. A year ago, equity markets were flying high, but things aren't so rosy now. Some companies have been hit particularly hard throughout this ordeal, and biotech giant Moderna (MRNA -3.00%) is one of them.
The vaccine maker has lost a little more than half of its value over the trailing 12-month period, partly because many investors think sales of its coronavirus vaccine, Spikevax, will drop off a cliff after this year. The coming 12 months could be crucial for Moderna, but what will they have in store for the company? Let's dig in and find out.
The coronavirus landscape
We are still in a pandemic, and that will remain the case until the official authorities say otherwise. Nor is it a pandemic only in name. While some are behaving as though COVID-19 is a thing of the past, we continue to experience surges in cases of the disease. In the U.S., the Biden Administration warned that a wave of the coronavirus is expected during the fall and winter.
True, 67.2% of the U.S population is fully inoculated against the disease as of this writing. But the booster market is alive and well. Moderna could continue to generate strong sales from its coronavirus-related efforts at least about a quarter of the way through 2023, until the winter season officially ends. The company expects at least $21 billion in sales this year based on the advanced purchase agreements (APAs) it's signed for its vaccine.
Moderna has penned more deals since making that projection. In July, it signed an agreement with the U.S. government to supply 66 million doses of its booster candidate that targets the omicron BA.4 and BA.5 strains, in addition to the original variant of the virus. The government has an option to acquire up to an additional 234 million doses.
Considering the price tag of up to $1.74 billion for the initial 66 million doses, this deal could be worth upward of $7 billion for Moderna. The biotech has also signed APAs with other nations for 2023. If the coronavirus becomes endemic, Moderna could continue to sell boosters, particularly to those most at risk from the illness.
For the next 12 months, I expect Moderna's sales of its coronavirus products to remain somewhat on par with what it has delivered over the past year and a half. Even if they drop, it won't be a substantial decline.
Moderna has plenty of ongoing clinical studies for which it could release some data within the following year. The most advanced ones include mRNA-1647, a potential vaccine for cytomegalovirus (CMV). Moderna initiated a phase 3 study for mRNA-1647 in October. In June, the company also kicked off a late-stage study for a potential influenza vaccine called mRNA-1010. That's in addition to the phase 3 portion of a clinical trial which started in February for its respiratory syncytial virus (RSV) vaccine, mRNA-1345.
Phase 3 studies can take between one and four years. Investors should expect top-line data from at least one of these ongoing trials within the next year, and positive results could move Moderna's stock in the right direction. There are existing vaccines against the flu, but it continues to cause thousands of hospitalizations and deaths every year. Meanwhile, there are currently no approved vaccines against CMV or RSV, meaning the opportunities here for Moderna could be highly lucrative.
The company has earlier-stage studies for which it could release some data relatively soon, considering that phase 1 or 2 clinical trials tend to take less time to complete. That includes mRNA-1189, a potential vaccine against the Epstein-Barr virus (EBV), and a couple more potential programs that target the flu.
Is Moderna stock a buy?
Concerns about Moderna's post-coronavirus prospects are justified, but it's too early to discount the COVID-19 vaccine market. While it's hard to know what that market will look like beyond the next six months, it's almost certainly here to stay. Moderna's sales in this competitive sphere will eventually drop, but thankfully the company has set up a solid foundation for the future.
Within half a decade, the many programs it is advancing, thanks to the funds it has generated through selling Spikevax, should allow it to launch brand-new products and start generating growing revenue and earnings. It may not be clear how Moderna will perform in the stock market over the coming 12 months, but long-term investors should stick with this biotech stock.