Moderna (MRNA -2.30%) stock soared earlier in the pandemic as the company developed its coronavirus vaccine and the product went on to generate billions of dollars in sales. But as demand for the vaccine declined, Moderna stock followed. Investors are worried about future growth since the vaccine is the biotech's only commercialized product.
But things may be about to turn around for Moderna. The biotech company aims to bring as many as 15 new products to market over the next five years and has the late-stage pipeline to support such aspirations. The commercialization of Moderna's next product may be right around the corner if all goes well during the regulatory review stage.
The U.S. Food and Drug Administration (FDA) is set to issue a decision on the company's respiratory syncytial virus (RSV) vaccine candidate by May 12. Should you buy shares of this ambitious biotech company before then?
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Rival RSV vaccines
Here's more information about this potential product. If approved, it won't be the first RSV vaccine to hit the market. GSK and Pfizer both won approval for their RSV vaccines last year, and they're the only such products out there right now. RSV is a common respiratory virus that causes cold-like symptoms, but for some -- such as infants or the elderly -- it could be serious. That's why vaccination is recommended for these populations.
Today, GSK's Arexvy is approved for adults 60 and older, and Pfizer's Abrysvo is approved for the same age and for pregnant women -- to prevent RSV in newborns through six months of age. Moderna is requesting approval of its RSV candidate, mRNA-1345, in adults as of age 60.
Though GSK and Pfizer both got a head start in this market, Moderna could carve out market share and eventually take a leadership position for two reasons. First, mRNA-1345 is the only one to come in a pre-filled syringe format. This makes it easier and faster for healthcare providers to administer, and results in fewer errors. All of this is a big plus for those giving the vaccine and those receiving it.
Second, in the phase 3 clinical trial of mRNA-1345, Moderna didn't observe cases of Guillain-Barre syndrome, a rare neurological disorder. But GSK and Pfizer both reported cases of this autoimmune condition in their trials. Some doctors, seeing this data, may recommend the Moderna product to their patients over others.
The $10 billion RSV market
Moderna estimates the peak annual market for RSV vaccines will be about $10 billion, so there could be room for all three companies to generate blockbuster revenue. And Moderna's solid trial data makes me optimistic the FDA will offer mRNA-1345 a nod, so the company soon may have two products on the market -- and be ready to tackle the fall vaccine season.
Now let's get back to our question: Should you buy shares of Moderna before the FDA's May 12 decision?
First, the decision may come on that day, but the agency also has been known to issue decisions earlier. So if you follow Moderna, you'll want to keep a close eye on the news in the coming days.
I think Moderna is a terrific long-term buy right now. However, that also should be the case after the upcoming decision, even if the shares get a boost from a potential nod.
Moderna is just getting started on the path to becoming a multiproduct company, and its late-stage pipeline means that status isn't too far off. All of this should result in significant revenue growth over time. If you get in on the stock before a potential RSV approval, great, but if you don't, there still should be plenty of time to buy Moderna and benefit from the long-term growth story.
