During the pandemic, Moderna's (MRNA -2.45%) billion-dollar revenue has been pretty much a sure thing. The coronavirus vaccine maker shares leadership with Pfizer. And the two companies' vaccines have found their spot among the world's best-selling pharmaceutical products. As a result, Moderna's shares have climbed more than 140% since the launch of its vaccine program.
But in recent times, investors have turned away from Moderna shares. That's because of uncertainty about post-pandemic vaccine sales. Today, though, Moderna has offered us a few clues that should remove at least some of that uncertainty. Let's check out three things you need to know about Moderna's post-pandemic revenue -- and find out if these points make the biotech a stock to buy.
1. Coronavirus vaccines could follow the flu
About 78% of the U.S. adult population has opted for a coronavirus vaccine so far. That's a high percentage. But this is in the context of a pandemic. The concern is that people's interest in getting vaccinated could drop off considerably once the pandemic is over.
What's more likely, though, is that coronavirus vaccine uptake will follow that of flu vaccines. This is what Moderna predicts. And it seems like a reasonable prediction. Here's why. Coronavirus is similar to flu in terms of symptoms and seasonal peaks in infection rates. That means people who generally go for flu shots probably would go for coronavirus vaccines too.
Today, the global flu vaccine market falls in the range of 500 million to 600 million doses. Let's imagine the coronavirus vaccine market comes in below that, at 400 million doses. And let's say the price per dose is $40 -- that's lower than the $60 Moderna has mentioned and the $110 Pfizer has mentioned. This leaves us with a $16 billion coronavirus vaccine market.
Yes, Moderna would bring in less than the $18.5 billion it generated last year. It shares the total vaccine market with other players. But Moderna's vaccine would still represent a major blockbuster, one that would bring in revenue year after year.
2. Next year may be a year of transition
So far, Moderna has been delivering vaccine doses to governments around the world. But as of next year, the company expects to enter a private market. That means Moderna will sell doses directly to distributors or healthcare providers.
This change may present a few challenges, from higher costs to more complicated logistics. For instance, Moderna will be responsible for all distribution costs in a private market. Moderna also plans on replacing multi-dose vials with a single-dose product. The company must plan the logistics of furnishing doses to many buyers versus just a single one per country.
Finally, as the coronavirus evolves, Moderna must continue to invest in innovation -- so that it's offering boosters that match the current variant each fall.
At the same time, investors will have to get used to revenue becoming just as seasonal as the virus itself. The company likely will record higher sales at the time of year when healthcare providers stock up on vaccine doses.
Next year should represent a transition for Moderna as all of this falls into place. That means we may see increased costs -- without necessarily seeing super-charged revenue.
3. The story doesn't end with the coronavirus
Moderna's revenue potential started with the coronavirus vaccine -- but it doesn't end there. The company has more than 44 programs in development. These programs span a wide range of specialties, including immuno-oncology, inhaled pulmonary therapies, and various public health vaccines.
Moderna's closest-to-market projects include vaccine candidates for flu and respiratory syncytial virus (RSV). The company has said these candidates may reach commercialization within the coming two to three years. And even more good news: These candidates each represent blockbuster opportunities.
All this means Moderna could begin generating significant revenue from multiple products in the not-too-distant future. Moderna's growth may suffer in the near term as the coronavirus market transitions. But high growth could return soon after -- and last.
What does this mean for investors?
The key word for Moderna investors right now is "patience." Next year probably will bring more expenses as Moderna prepares for its next phase of growth. And it will take time for that growth to kick in.
Meanwhile, right now looks like a good time to pick up shares of Moderna. The stock has slipped about 40% this year. Wall Street expects it to gain about that much in the coming 12 months.
Of course, Moderna's share price may not take off as quickly as Wall Street predicts. But that's OK. This biotech is laying groundwork that could result in a big win for earnings -- and stock performance -- down the road. That's something worth waiting for.
