Moderna (MRNA) set to take advantage of opportunity in vaccines

Shares of Moderna Inc. (NASDAQ: MRNA) have gained 246% since the beginning of this year and more than 279% over the past 52 weeks. The stock was down 3% in afternoon hours on Monday.

Moderna is one of the companies at the forefront of the COVID-19 vaccine development efforts currently underway in the US, and the company’s progress in this area is sure to affect the stock in the near term.

Potential

Moderna believes its mRNA medicines have the potential to address several unmet medical needs and that they can be used in the treatment of diseases which cannot be handled by recombinant protein or small molecules. The platform nature of mRNA give the medicines a higher chance of technical success compared to traditional medicines. Since the manufacturing capital intensity of mRNA is materially lower than recombinant proteins, the cost of manufacturing at commercial scale could be similar to small molecule injectables.

At its R&D day last week, Moderna said it was increasing its investment in vaccines and that it would develop a seasonal flu vaccine given the unmet need for highly effective vaccines. The company is also entering into gene editing through its collaboration with Vertex Pharmaceuticals (NASDAQ: VRTX). The partnership will focus on delivering gene-editing therapies for the treatment of cystic fibrosis.

COVID-19 vaccine

The Phase 3 COVE study of COVID vaccine candidate (mRNA-1273) of 30,000 volunteers in the US has enrolled 25,296 participants as of September 16. 10,025 participants received their second vaccination to date.

Moderna had reported positive results from the Phase I study and the company started Phase II during its second quarter. Moderna also signed a long-term partnership with Lonza for manufacturing capacity to make mRNA and formulate it at large industrial scale.

In August, Moderna announced a supply agreement with the US government to provide 100 million doses of mRNA-1273. The company also announced that it was in discussions with Europe and Japan to supply them with 80 million and 40 million doses of the vaccine respectively.

Moderna expects the cash impact of COVID-related investments to be between $0.55 billion to $0.75 billion in 2020. This includes approx. $0.2 billion in capital investments, with the balance of the expenses related to raw materials and production activity.  

Pipeline

Moderna reported positive interim data from the Phase 2 study of its CMV vaccine mRNA-1647 in CMV-seronegative and CMV-seropositive treatment groups. The Phase 3 pivotal study is set to begin in 2021.

The company is entering the seasonal flu business. Seasonal flu occurs every year pressuring healthcare systems and the current vaccines are only 40-60% effective. Moderna believes its mRNA platform could deliver more effective vaccines for high risk groups.  

Click here to read the full transcript of Moderna Q2 2020 earnings call