Moderna: Everything you need to know about Moderna stock
Oliver Brett November 3, 2021 12:57 PM
Moderna has risen rapidly through the ranks of “big pharma” companies after winning multiple contracts to produce Covid-19 vaccines for large sections of the world’s populations. But is it profitable and what scope does it have for growth? Read our guide for the full lowdown.
What does Moderna do?
Moderna is a pharmaceutical and biotechnology company based in the United States with headquarters in Cambridge, Massachusetts, the city where the world-renowned Harvard University is situated. Moderna focuses on drug discovery, drug development, and vaccine technologies. It was founded in 2010.
It was initially set up to develop, and ultimately commercialise the ground-breaking research work of stem cell biologist Derrick Rossi. In November 2020, Moderna announced it had developed a Covid-19 vaccine that had shown initial evidence of a 94% success rate in preventing the deadly virus. The vaccine has since been approved for use across multiple jurisdictions worldwide.
Why are investors interested in Moderna stock?
Investors have been closely watching Moderna (NASDAQ:MRNA) since its Covid-19 vaccine won widespread approval to be used in the fight to combat the coronavirus pandemic.Many pharmaceutical companies proved popular “safe haven” stock options during 2020. For instance, Moderna’s price had already trebled in price between January and October 2020 before spiking again with news of the imminent Covid-19 vaccine rollout. Its price has since proved volatile as investors ponder the company’s long-term value.
Some investors may feel it is a stock that is in danger of becoming over-bought, but others are keen to look beyond the pandemic. Moderna is advantageously placed to further develop its highly innovative biotech in which cells are “directed” to make proteins that work as drugs and vaccines. Because of this, and the fact it is working on developing new vaccines to combat many other diseases, it has been described as a potential takeover target.
How does Moderna make money?
Moderna makes money by selling its vaccines to governments around the world. That's a lot of vaccines... and a lot of money. The European Union initially bought 310 million shots of Moderna’s Covid vaccine, and has an option for a further 150 million in 2022.
The US government has ordered 300m shots. Japan, the United Kingdom and others are also ordering large quantities of vaccine while 2022 - as other regions get up-to-speed with vaccination and booster shots are requested - promises to be a very busy year. Moderna charges an average of $33 for a pair of shots.
What is Moderna's business strategy?
Moderna's business strategy was initially focused on research, advancing programs in what was then the unproven field of messenger RNA (mRNA). It has risen to rapid prominence in a sector dominated by much more established enterprises by focusing purely on mRNA medicines, in which it is “developing a new class of drug that hacks the very operating system of life,” according to a Forbes editorial in 2016.
But remarkably, Moderna did not have a single product on the market when getting approval for its Covid vaccine. That small matter notwithstanding, it has proved adept at managing a diverse clinical portfolio of vaccines and therapeutics while managing a relatively small team of staff.
In addition, it has developed a broad intellectual property portfolio in areas including mRNA and lipid nanoparticle formulation, plus an integrated manufacturing plant that allows for both clinical and commercial production at scale and at what it claims is “unprecedented” speed.
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Is Moderna profitable?
Up until 2021, Moderna had never been profitable. But that is all changing in dramatic fashion now. Not only has Moderna started posting profits in 2021, it has been smashing profit forecasts as well.
Q2 profts in 2021 proved to be well above expectations as almost 200 million doses of its Covid-19 vaccine were distributed. Airfinity, the health data analytics group, predicted in October 2021 that Moderna's 2022 vaccine sales would hit $38.7 billion, in view of recurring global vaccination requirements.
This estimate is almost double the previous consensus figure. And this is before you consider Moderna’s scope to unearth new drugs and vaccines to combat other diseases.
How much is Moderna worth?
Judged on its share price as of November 3, 2021, Moderna has a market cap of $140.72 Billion. That's more than double where it was in May of the same year and puts it inside the top 100 of the most valuable public companies by market cap.
Net income for the quarter to June 30 was $2.78 billion. Revenue rose to $4.35 billion from just $67 million and product sales grew to $4.20 billion to top forecasts of $4.16 billion.
The big numbers are set to continue. Dose capacity for its COVID-19 vaccine is expected to be between 800 million and 1 billion doses in 2021, and it is due to easily double that. Doses are expected to rise to between 2 billion to 3 billion doses in 2022.
In February 2020, at a time when coronavirus was in the news but its effects had not yet been felt, Moderna was worth barely $6 billion.
Is Moderna stock volatile?
Moderna stock has a tendency to make more volatile moves than most typical equities. In early October 2021, it declined by about 20% in a week, considerably underperforming broader indices.
This was partially in response to news released by pharma giant Merck, who had provided positive updates on its Covid-19 tablet. Research suggested the tablet could cut the risk of hospitalisation or death by 50% for patients with moderate Covid-19 symptoms.
At the same time, data from Canada indicated the Moderna vaccine was linked to higher rates of heart inflammation. While the condition is said to be very rare and only results in mild illness, it was thought this might cause some apprehension among people, especially vaccine sceptics.
Moderna's volatility makes it a popular stock for swing traders.
Who owns Moderna?
Robert S. Langer owns a total of 11.5 million Moderna shares, representing 2.9% of the company's total shares outstanding. Langer serves on the board of directors. He is the David H. Koch Institute Professor at the Massachusetts Institute of Technology (MIT).
Stéphane Bancel, the chief executive officer, and Noubar B. Afeyan, one of the company's co-founders and is chair of the board, are the next two biggest individual shareholders. The biggest institutional shareholder is global investment management firm Baillie Gifford.
Moderna: Its board of directors
- Noubar Afeyan, Ph.D., Co-founder and Chairman, Moderna; CEO, Flagship Pioneering
- Stéphane Bancel, Chief Executive Officer, Moderna
- Stephen Berenson, Managing Partner, Flagship Pioneering
- Sandra Horning, M.D., Co-founder and Advisor, EQRx
- Robert Langer, Sc.D., Academic Co-Founder, Moderna; David H. Koch Institute Professor, MIT
- Elizabeth (Betsy) Nabel, M.D., Executive Vice President for Strategy at ModeX Therapeutics
- François Nader, M.D., Former President, CEO and Executive Director, NPS Pharmaceuticals
- Paul Sagan, Senior Advisor and Executive-in-Residence, General Catalyst
- Elizabeth Tallett, Former Principal, Hunter Partners
What you should know before trading Moderna stock
Moderna trades on the NASDAQ exchange under the ticker symbol MRNA. In common with all companies quoted on the NASDAQ, its shares actively change hands between 9.30am and 4.00pm Eastern Time (usually five hours behind the time in the UK), Monday to Friday (excluding nine federal holidays).
Moderna proceeded to a successful initial public offering in December 2018 but its shares have become particularly popular trading instruments since the second half of 2020. Because of that popularity, the market in Moderna shares tends to show good liquidity, with tight margins. Risk management strategies are advised when trading Moderna, because it is a stock that can trade with a degree of volatility.
How to trade Moderna stock
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