Moderna (MRNA +6.30%) stock skyrocketed in early pandemic days -- and the company became a household name -- as it launched its coronavirus vaccine. This first product, and one using the new messenger RNA technology, brought in billions of dollars in revenue and proved the efficacy of mRNA.
But in recent years, as demand for the vaccine declined, Moderna's earnings followed. The company suffered various setbacks, such as the failure of its cytomegalovirus (CMV) vaccine candidate in late-stage trials, and investors no longer rushed to get in on this biotech stock.
Things may be turning around for Moderna, though: The stock has soared more than 100% since the start of the year. And just recently, the company announced positive news -- to be confirmed on or before Aug. 5. Should you buy Moderna stock before that date? Let's find out.
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Moderna's mRNA technology
So first, let's take a quick look at the Moderna story and strategy. As mentioned, the company took center stage during early pandemic days, thanks to its coronavirus vaccine. Moderna uses mRNA in this product and throughout its pipeline, and it works by teaching the body to make proteins to fight off a particular virus or disease.
The coronavirus approval offered Moderna the opportunity to prove that this technique works -- and Moderna went on to win approval for a respiratory syncytial virus (RSV) vaccine and a second coronavirus vaccine.
Meanwhile, the company continued shepherding other candidates through the pipeline -- from respiratory and latent virus vaccine candidates to investigational oncology and rare disease therapeutics. Moderna suffered setbacks in recent years, from RSV vaccine sales coming in lower than expected to the failure of its CMV candidate -- one that was expected to become a blockbuster -- in a phase 3 trial.
But setbacks are part of the story for all biotech and pharma companies and don't necessarily alter the long-term growth story. In this case, the failures don't call into question Moderna's mRNA technology, and the company's pipeline is strong, with many promising candidates. All of this is positive.
NASDAQ: MRNA
Key Data Points
Three potential product launches
In fact, Moderna is gearing up for potential product launches in the coming years. The biotech aims to release three, including a combination flu and coronavirus vaccine, and seasonal flu and norovirus vaccines, over 2027 and 2028. The company says late-stage data from rare disease and oncology trials may also lead to launches in those areas just ahead. So Moderna may be at a key transition point right now, and investors have recognized this, as we can see through the stock price performance since the start of the year.
Now, let's consider what's about to unfold on or just before Aug. 5. It has to do with the company's investigational flu vaccine candidate, mRNA-1010. A U.S. Food and Drug Administration advisory panel voted unanimously in favor of the candidate, a vote that the benefits outweigh the risks. The independent committee voted in favor for the 50 to 64 age group and the 65-and-older age group.
An Aug. 5 deadline
Now, the FDA has a deadline of Aug. 5 to issue a decision regarding the vaccine. Though the regulatory agency doesn't have to follow the recommendation of the committee, it generally does -- so there is reason for investors to be optimistic about what might unfold. And this puts Moderna's flu candidate on track to launch for the 2026-2027 flu season.
Does all of this make Moderna a buy today? Moderna clearly has reached a key turning point, with many potential revenue drivers ahead, and that makes now a great time to be a shareholder. It's important to keep in mind that some risk is involved. Even if Moderna wins approval of its flu vaccine, soaring sales may not happen overnight. Still, this would be a critical step forward for the company as it builds out its presence as a multi-product commercial-stage biotech.
Moderna stock has climbed quite a bit this year, so a lot of the good news could be priced in at today's levels. A potential flu vaccine approval may result in a pop for the stock price, but I don't think gains will continue on uninterrupted. There may be opportunities in the near future and after Aug. 5 to buy Moderna on the dip -- and that's when growth investors should make the move.
