Moderna (MRNA -1.69%) is a growth stock that's had plenty of time in the limelight, but that doesn't mean it'd fit the exacting specifications of Warren Buffett. Berkshire Hathaway's portfolio isn't known for making speculative bets on biotech companies, and the Oracle of Omaha's penchant for reliable growth seems anathema to the industry as a whole, even when considering quality businesses like Moderna. 

But the situation of the coronavirus vaccine maker today isn't necessarily the same as what it'll be in the future, so let's investigate whether the Moderna of tomorrow might eventually fit Buffett's bill.

This isn't a Buffett stock right now

There are a few reasons why Warren Buffett would probably not want to invest in Moderna today. 

First, Buffett tends to eschew businesses that require a constant influx of research and development (R&D) spending to stay competitive. After all, that implies there's an ongoing R&D arms race with competitors, which squeezes margins and reduces the amount of capital left over to return to investors. And that's precisely Moderna's situation as it needs to stay ahead of other companies in its space, particularly direct competitors like BioNTech.

For instance, in 2022 Moderna spent $3.3 billion on R&D. BioNTech's were around $1.6 billion. So Moderna could probably simultaneously advance with more of its pipeline programs than BioNTech, but that state of affairs is contingent on spending, which is what Buffett would take issue with here. 

Second, and perhaps more importantly than the R&D arms race, is the simple fact that biotech stocks are risky. The Oracle of Omaha hates taking on undue risk, especially when that level of risk is consistent over time rather than falling after the company clears key hurdles. And with biotech companies developing new drugs, there's really not any way to de-risk the process. 

Only 13.8% of new medicines entering phase 1 clinical trials end up getting regulatory approval for commercialization. Even some of the most carefully thought-out clinical trials can fail to demonstrate a candidate's benefits or safety.

Likewise, getting a drug commercialized is not any guarantee of a company's success as competitors are often angling to develop medicines for the same markets -- and their products might be shown to perform better for reasons that are well outside of management's control. None of those issues have much to do with Moderna specifically, but it's still victim to the same forces, and at risk of the same negative outcomes. 

Finally, Buffett probably would likely take issue with Moderna's lack of one of the competitive advantages that his favorite investments like Apple tend to have. Simply put, Moderna is never going to have a brand that attracts and retains customers since consumers rarely have much of a choice about which vaccine they get for a given indication. So it won't be able to defend its market share except by making superior products.

Nor can Moderna claim any technologies that slash its manufacturing or R&D costs or deliver superior safety or efficacy. Its competitors are largely in the same boat, and Buffett doesn't really tend to invest in them either.

...but it might be in the future

Despite the above, there is a possible path in which Moderna could conceivably become a minor Buffett holding. It starts and ends with the recurring revenue that it could potentially generate from its vaccinations and in-progress candidates for illnesses that will always be present, which is to say diseases like COVID, influenza, and respiratory syncytial virus (RSV), among others.

Moderna is making jabs for each of these three viruses, and it's also developing combination jabs that could ostensibly deal with all three at the same time. That would, in theory, mean people would only need to get one single vaccination to be protected annually against most of the common threats in their environment. If such a combination shot could actually lead to significant annual recurring revenue that would pay for the biotech's R&D expenses, it'd be a virtuous cycle that might attract Buffett to invest. 

Still, that outcome is a bit of a pipe dream at the moment. Moderna's sales of coronavirus shots are expected to fall sharply, and the steady level of long-term sales it'll get is unknown. Even if the long-term appeal of its shots is quantified in the next few years, don't expect Warren to invest until it's clear how earnings might expand consistently as a result of that appeal. Until then, you could probably buy a few shares of Moderna even if Buffett wouldn't.