Moderna (MRNA): Development programs, additional approvals provide optimism

Moderna Inc. (NASDAQ: MRNA) seems to be on a roll right now. The stock has skyrocketed over 500% in the past one year and has gained 55% over the past three months. Shares were up 3.7% in afternoon hours on Tuesday.

After successfully gaining authorization for its COVID-19 vaccine, Moderna continues to expand its pipeline of vaccines with three new development programs in the infectious diseases portfolio. The vast unmet need within this sector provides significant opportunity for growth. The company will also gain from the demand for its COVID-19 vaccine in the coming months. All these factors are expected to give the stock a boost.

Pipeline

Moderna will evaluate three candidates – mRNA-1010, mRNA-1020 and mRNA-1030 under its flu vaccine category. In the US, approx. 8% of the population suffers from flu symptoms each year and the average economic burden of flu is estimated to be approx. $11 billion per year. Phase 1 clinical trials for this program are expected to begin this year.

The company also plans to explore potential combination vaccines against flu, SARS-CoV-2, RSV and human metapneumovirus (hMPV).

In the HIV vaccine category, the company will evaluate two candidates – mRNA-1644 and mRNA-1574. mRNA-1644 is being developed in partnership with the International AIDS Vaccine Initiative (IAVI) and the Bill and Melinda Gates Foundation (BMGF) while mRNA-1574 is being developed in association with the National Institutes of Health (NIH). The Phase 1 clinical trials for this category are also slated to begin this year.

Moderna is also working on a vaccine for the Nipah virus, which is estimated to have a case fatality rate of 40-75% among infected patients. Its vaccine candidate mRNA-1215 was co-developed by Moderna and the NIH’s Vaccine Research Center (VRC). The company did not provide an update on clinical trials for this vaccine candidate.

Moderna sees a vast unmet need in the infectious diseases portfolio. At an analyst conference, the company stated that over the last 40 years, over 80 new viruses were discovered but only 4% have a vaccine commercially available in the US. In 2019, worldwide vaccine revenue totaled $35 billion. Moderna sees massive growth opportunity in vaccine development over the next 5-10 years, particularly in the infectious diseases category.

COVID-19 vaccine

Moderna received approval for its COVID-19 vaccine from Switzerland on Tuesday. The Swiss Federal Government has also secured 7.5 million doses of the vaccine and the first deliveries are expected to start next week. The company’s vaccine has already been approved in the US, UK, EU, Canada and Israel.

Moderna has signed Advance Purchase Agreements (APAs) for $11.7 billion for its COVID-19 vaccine and the company is discussing the signing of more APAs for deliveries in 2021 and 2022. Moderna expects to be able to deliver 600 million to up to 1 billion doses in 2021 and with a ramp-up in manufacturing capacity, the company expects to be able to deliver up to 1.2 billion doses in 2022.  

Strong cash position

Moderna expects cash, cash equivalents and investments as of December 31, 2020 to be approx. $5.25 billion compared to $1.26 billion as of December 31, 2019. This includes $2.81 billion in customer deposits for future supply of product.

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