Shares of Moderna (MRNA 0.87%) were sinking 9% lower this week as of Thursday's market close, according to data provided by S&P Global Market Intelligence. The decline appears to be the result of investors taking profits after Moderna stock soared 25% last week.
What's behind the big moves for Moderna? Avian flu. Reports of human cases of H5N1 avian flu (also known as bird flu) in Australia and the U.S. caused several vaccine stocks to jump last week.
The sell-off in Moderna's shares was even worse early on Wednesday with the stock falling as much as 13.9%. However, Moderna rebounded somewhat after The Financial Times reported that the U.S. government is close to finalizing a deal to fund a late-stage clinical study of Moderna's experimental messenger RNA (mRNA) bird flu vaccine.
NASDAQ: MRNA
Key Data Points
How big of a deal could bird flu be for Moderna?
Moderna executives didn't mention the experimental bird flu vaccine at all in the company's first-quarter conference call earlier this month. Investors probably shouldn't make too much of the hoopla either at this point.
The number of bird flu cases in humans so far is low. H5N1 has a high mortality rate but isn't very contagious between people. There haven't been any signs yet that the virus is mutating in ways that increase its transmissibility.
Is Moderna stock a buy on the dip?
Even if there isn't a significant opportunity for Moderna with its experimental bird flu vaccine, I think the stock is a good pick to buy on the dip. The company has several other potential catalysts on the way, notably including the anticipated U.S. approval of its respiratory syncytial virus (RSV) vaccine.
