Moderna (MRNA 3.23%) was once the stock everyone rushed to add to their portfolios. That's because the company made the world's most sought-after pharma product: the coronavirus vaccine.
During earlier pandemic days, Moderna and rival Pfizer saw sales of their vaccines explode higher. In the case of Moderna, this product brought in as much as $18 billion in revenue at its peak back in 2022. But as the pandemic reached its later stages and vaccine demand declined, Moderna saw earnings and stock performance tumble.
The problem was that the biotech company depended on the vaccine alone for product revenue. The vaccine was the company's first commercialized product, and it was only joined by a second product -- a respiratory syncytial virus (RSV) vaccine -- in 2024. So, when investors saw demand for the coronavirus vaccine dropping, many rushed for the exit.
Since that moment, Moderna has taken steps to pave the path to long-term growth -- from cutting costs to focusing on its vast pipeline. Considering the full picture, now, with the stock down 80% over three years, should you buy the dip on Moderna? Let's find out.
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The right product at the right moment
Moderna grabbed the world's attention because it launched a big product at just the right moment, and at the same time, this product relied on a new technology: harnessing the power of messenger RNA, or mRNA. Moderna's entire pipeline involves this technique, so an approval of one such product is positive. It suggests that mRNA technology is viable and could work in many other areas. The process involves using mRNA to teach the body how to make specific proteins to protect itself or fight off disease.
Moderna had been working on the technology for years, so it was able to bring a coronavirus vaccine to market in a period of months during the crisis -- regulators helped by fast-tracking approval processes, considering the pandemic situation.
Meanwhile, Moderna used the blockbuster revenue from this vaccine to support other programs, from vaccine candidates for respiratory viruses such as RSV to candidates for latent viruses like cytomegalovirus (CMV). And Moderna also tackled completely different areas like rare diseases and oncology. The billion-dollar opportunities seemed to multiply.
A few problems have arisen since Moderna's coronavirus successes, however. Costs, which no longer matched the revenue opportunity, needed to be cut -- Moderna has done this and made significant progress, but the job isn't yet complete. The company aims to lower 2026 cash costs to about $4.2 billion and those of 2027 to the range of $3.5 billion and $3.9 billion. So this is a work in progress.
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Moderna's disappointing news
Moderna also has faced some disappointment along this path to becoming a multi-product company. The biotech's RSV vaccine, launched after those of rivals, hasn't brought in as much revenue as expected. Then this fall, Moderna's CMV candidate failed to meet a key endpoint -- protecting against CMV infection in women of childbearing age -- in its phase 3 trial, so the company ended the program. (Though it will continue a phase 2 CMV trial in bone marrow transplant patients.) But, clearly, the loss of the phase 3 program was a significant one, as it represented a massive opportunity: the prevention of transmission of CMV from mothers to their babies during pregnancy.
Finally, Moderna stock has struggled to take off because investors have continued to view it as a coronavirus player -- and with growth in this area on the decline, Moderna has fallen out of favor.
However, there are some bright spots in the dark picture I've painted. Moderna expects its seasonal vaccine franchise -- potentially growing from three products to six over the next few years -- to help it achieve cash breakeven in 2028. Meanwhile, the biotech is investing in its oncology and rare disease programs and expects trial readouts from nine phase 2 and phase 3 oncology programs -- any positive news could represent a catalyst for the stock.
Time to buy Moderna?
Now, let's return to our question: Is Moderna a buy on the dip? It's clear that Moderna has traveled through some tough times, and challenges may persist. The failure of the CMV candidate was a significant loss for the company, though these sorts of events are part of the drug development process. This potential for failure is one of the biggest risks of investing in biotech stocks.
Meanwhile, Moderna's proven that its mRNA methods work, and the company has a deep pipeline.
The decision whether to buy now depends on your investment style. If you're not comfortable with risk, it's best to avoid Moderna. But if you're an aggressive investor looking for a future biotech winner, you might consider picking up a few shares at today's level. If Moderna reaches its goals, this company may represent a fantastic recovery and growth story -- but success may take some time.
