Can you believe that Moderna (MRNA 5.52%) was once worth more than $195 billion in 2021? Back then, the business looked on track to be the next big healthcare company.
Then, demand for its COVID-19 vaccine started to diminish. As hospitals resumed normal operations and anti-vaccine sentiment grew, there wasn't nearly as much demand for COVID-19 shots anymore. While Moderna still generates revenue from its vaccine, it's just a fraction of what it was in 2021.
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The company may have made a colossal mistake
Moderna and Pfizer were the two main U.S. companies developing COVID-19 vaccines during the pandemic's height, and they generated significant revenue as a result. In the years since, their strategies diverged. Pfizer went on an acquisition spree in an effort to further diversify its business. Moderna largely remained focused on developing COVID-19 and flu combination shots and investing in research and development (R&D), all while having little else to fall back on.
In 2022, the company's sales peaked at just under $18.9 billion. In the trailing 12 months, however, Moderna's top line totaled just a fraction of that -- $3.1 billion. Its operating loss is even higher, at $3.3 billion.
The one treatment that could be a game changer for Moderna is the personalized cancer vaccine it is developing with Merck, mRNA-4157. In a phase 2 trial, mRNA-4157 combined with Merck's top cancer drug Keytruda reduced the risk of recurrence or death by 49% in high-risk patients with stage III/IV melanoma (after complete resection), when compared to just Keytruda by itself. But it's by no means a sure thing to obtain approval.
Is Moderna stock worth taking a chance on?
Although Moderna's valuation has come down significantly in recent years, its market cap of $10.4 billion is still high for a business with some serious question marks about its future growth. For now, there's little reason to be optimistic that things will get better anytime soon. This is why this company looks like it may be a one-hit wonder.
