Moderna (MRNA 1.69%) helped some investors make a fortune over the past few years. The stock has climbed more than 400% since March 2020 -- that's when the company's coronavirus vaccine program gained traction. Recently, though, investors have worried about Moderna's post-pandemic revenue, and that's weighed on share performance.
But it's important to keep in mind that Moderna doesn't plan on relying on its blockbuster coronavirus vaccine forever. In fact, a new phase of growth may be around the corner. Before you decide whether to buy -- or sell -- Moderna shares, though, check out these three things that smart investors know about the biotech company.
1. 2023 is a transition year
This year, Moderna's vaccine sales aren't going to look anything like the levels we've seen. At the height of the pandemic, the vaccine brought in more than $17 billion in revenue annually. Now, as we transition to an endemic environment, governments have ordered $5 billion in Moderna vaccines for this year. That number could move higher, but it's not likely to reach anywhere near past figures.
Meanwhile, Moderna predicts the coronavirus vaccine will follow in the footsteps of the flu shot. If this happens, about half of Americans may go for an annual coronavirus booster. At the same time, Moderna plans on increasing the price of its product. So, the vaccine, though likely bringing in less than it did during the worst of the pandemic, still could remain well into blockbuster territory.
All of this could take a year or two to play out. So, a drop in Moderna's vaccine sales this year shouldn't represent a big concern. It's important for investors to consider 2023 as a transition year -- and possibly see 2024 as a new starting point in terms of vaccine sales.
2. Investment in expansion is a positive sign
Moderna recently announced an expansion plan that includes opening new offices on the West Coast and hiring 2,000 employees worldwide. The company already has five East Coast locations, and 17 offices globally.
The company will open these offices in Seattle and South San Francisco. The Seattle location will focus on technology, especially the use of artificial intelligence in Moderna's processes.
Moderna hasn't said how much it's spending on the expansion, but it clearly is a big investment for the company. And this is a positive sign. If Moderna's future was tied only to selling one product -- the coronavirus vaccine -- it's unlikely the company would make such a move.
This investment is especially remarkable considering today's tough economic context. While many companies have found themselves cutting jobs and closing offices, Moderna is doing just the opposite. This shows Moderna's confidence in its future -- and it's increasing investors' confidence too.
3. You can count on pipeline progress, thanks to the coronavirus vaccine
Moderna said it had $18.2 billion in cash as of Dec. 31, 2022. Thanks to sales of its coronavirus vaccine, Moderna has been able to build its cash level significantly. At the end of 2020, the company's cash totaled $5.25 billion.
This increase has helped Moderna bring other products through the pipeline. In fact, today, Moderna has three phase 3 programs that could lead to product launches within the next few years. These are vaccine candidates for respiratory syncytial virus (RSV), flu, and cytomegalovirus (CMV). The company aims to request regulatory approval for the RSV candidate during the first half of this year.
These candidates each represent blockbuster revenue opportunities. And even with the idea of coronavirus vaccine revenue slipping, the company should still continue to generate enough cash to fuel pipeline development.
So, as vaccine revenue declines, the product will still play a key role: Helping Moderna launch other products down the road.
What does all this mean for you?
Moderna stock likely won't offer you a quick win as it did during the early days of the pandemic. But that's OK. Moderna has what it takes to potentially offer you lasting gains over the long term. That's even better than a short-term increase.
And considering the stock's decline over the past year, right now represents a solid entry point. Moderna is about to show the world that it's more than a coronavirus vaccine company. This will take some time, but the biotech is progressing nicely. And that makes it worth the wait.
