Moderna (MRNA 4.95%) went from being an unknown biotech to a household name thanks to its work developing and marketing one of the most successful COVID-19 vaccines. Though the company has delivered outsize returns since late 2019, its shares are down more than 70% from their peak in 2021. Moderna's coronavirus-related revenue dropped off a cliff, dragging down its bottom line (and its stock price along with it). However, several developments may suggest that it is still worth investing in Moderna. Is the company doing enough to make its prospects attractive? Let's find out.
Moving on from the coronavirus market
Moderna's success in the COVID-19 vaccine market helped it generate enough funds to advance other programs through the pipeline. Though it will remain a leader in the field -- it still generates revenue from its famous vaccine -- Moderna is expanding its lineup. The biotech recently earned approval for mRESVIA, a vaccine for the respiratory syncytial virus (RSV). The very first RSV vaccines were launched just last year, so it promises to be a race to the top between the companies involved.
How will Moderna perform? Some analysts estimate that mRESVIA could generate $830.5 million in sales by next year. That's nowhere near the amount in revenue Moderna made from its COVID-19 vaccine at the pandemic's peak, but it is almost 25% of the $4 billion the biotech expects in revenue this year, so it's not an insignificant sum. Moderna projects that it will get back to top-line growth next year, a feat it will achieve thanks to its new RSV vaccine. In other words, this product could be a strong growth driver for years to come.
There will be more breakthroughs
Moderna is working on several more late-stage products. It recently announced positive phase 3 results for a combined COVID/flu vaccine. It's easy to see the benefit of this combination vaccine approach. And though many influenza vaccines are on the market, their efficacy is generally not impressive -- typically somewhere between 40% and 60%, according to the Centers for Disease Control and Prevention.
Moderna's candidate showed higher immune responses in patients than commercialized COVID and flu vaccines. The biotech is also running a phase 3 study for a potential vaccine for the cytomegalovirus (CMV), mRNA-1647. Though CMV is relatively harmless in healthy individuals, it can cause serious infections in people with compromised immune systems. Yet there are no vaccines against this virus. The research company Evaluate Pharma estimated that mRNA-1647 could generate $1.5 billion by 2028.
Furthermore, the company is partnering with pharmaceutical giant Merck to develop a personalized cancer vaccine, mRNA-4157. In a phase 2 study, this candidate, in combination with Merck's cancer drug Keytruda, proved more effective at reducing the risk of recurrence in melanoma patients than Keytruda alone. Translation: It is yet another highly promising candidate for the biotech. And the company has no shortage of them.
Moderna's pipeline is incredibly deep, featuring more than three dozen programs. Moderna is not shy about targeting challenging conditions. Its pipeline includes potential HIV vaccines. That would be a significant breakthrough if Moderna can pull it off.
The future should be bright
What are the traits of a successful biotech company? There is no definitive list, but it includes innovative abilities, a pipeline that can lead to important approvals, and the funds necessary to finance the expensive drug or vaccine development process. Moderna has all three. Its success in the COVID-19 vaccine market and in the mRNA vaccine field, which was nonexistent before the pandemic, is a testament to its trailblazing capabilities.
Moderna's mRNA platform now features a long list of candidates, and the biotech still has enough cash on hand -- $12.2 billion as of the end of the first quarter -- to fund its programs despite a decline in coronavirus-related sales. So Moderna's shares remain a buy, especially as they remain down from their all-time highs.
