Moderna (MRNA 1.69%) used to be a stock market star, climbing 1,700% from the start of 2020 through July of 2021. That was as the biotech company brought its coronavirus vaccine from the lab to market and generated billions of dollars in earnings. Investors liked that, and it clearly showed in the stock performance.
But Moderna stock lost ground once investors started to think about the future and what sales might look like in a post-pandemic world. After all, the vaccine is Moderna's only product right now, and demand for it has declined. And, in spite of Moderna's progress on late-stage programs and encouraging future revenue forecasts, the shares have failed to take off.
Two particular factors, though, could turn things around for the company. Let's check out these potential events that might boost the stock in the coming months.
1. A positive trend in vaccine sales
Moderna last year brought in peak product sales of more than $18 billion as it sold vaccines to governments around the world. This year, though, the company predicts vaccine sales will total $6 billion to $8 billion. That's because fewer people are going for vaccines now than in the earlier stages of the pandemic -- as Moderna and investors expected.
But even if vaccine sales don't come anywhere close to their past peak, strong vaccine uptake could prompt investors to return to Moderna shares. That's because this year should give us an idea of exactly how much of the population will go for annual coronavirus jabs.
Moderna has said the market might mimic that for the flu vaccine, implying about 50% of Americans will seek out shots. If this does indeed happen, or if we approach such a percentage, this could be very good news for Moderna since annual shots represent recurrent revenue.
The biotech aims to build a respiratory vaccine franchise -- including shots for the coronavirus, the flu, and respiratory syncytial virus (RSV) -- that could bring in as much as $15 billion in revenue by 2027. Strength in coronavirus vaccine uptake could make investors more optimistic about Moderna's chances of reaching this goal -- and prompt them to buy the stock.
2. Early signs of success in RSV
As for the respiratory vaccine franchise, Moderna's potential RSV vaccine represents an important part of it. Right now, regulators are reviewing the candidate, and Moderna expects a decision from the U.S. Food and Drug Administration (FDA) in April. The company also has submitted the candidate to regulators in Europe, the U.K., and other countries.
Even though Pfizer and GSK reached commercialization first with RSV vaccines, there's still reason to be excited about Moderna's possible debut.
First, the market could reach $10 billion, offering a blockbuster opportunity for more than one participant. Second, Moderna's safety profile might appeal to doctors and other healthcare providers. While Pfizer and GSK reported cases of Guillain-Barré syndrome in their trials, Moderna didn't.
Lastly, healthcare providers also might like Moderna's vaccine for a very practical reason: It comes in a single-dose pre-filled syringe. This makes it quicker to administer and greatly reduces the potential for errors. The Pfizer and GSK vaccines must be reconstituted before use, adding an additional step for those administering the product.
If Moderna wins approval and quickly gains some market share, investors may cheer -- and decide to give the biotech a chance.
Why must one or both of these things happen?
Even though Moderna has forecast the launch of possibly 15 new products in the coming five years and billion-dollar revenue down the road, the stock has stagnated.
Investors want to see concrete evidence that Moderna can indeed continue to generate significant revenue from the coronavirus vaccine and that the company can bring other products to market. If one or both of the events mentioned above happen, investors might allow themselves to start believing in the biotech's future beyond the pandemic.
Of course, you don't have to wait for these potential events to buy Moderna stock. The shares, trading at only about 8 times forward earnings estimates, look dirt cheap right now considering the company's long-term prospects.
Sometimes it's hard to get excited about a stock that's in the doldrums. But if the company's prospects look strong and the current price is interesting -- as in Moderna's case -- buying during the tough times could result in enormous gains down the road.
