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Moderna’s shares have risen 239% so far this year, and the biotech company, which has no approved medications, has a market capitalization of more than $ 24 billion.
But in a note sent out Monday morning, Jefferies analyst Michael Yee writes that the stock may go higher still.
The most important story for Moderna (ticker: MRNA) is the company’s Covid-19 vaccine, which turned what was once a controversial but promising biotech into a household name. The company is about to start phase 3 trials of the vaccine. Yee thinks it could soon be a box office success for the company.
“We believe the company’s Covid-19 mRNA-1273 vaccine will work and that large orders will come,” he wrote.
Yee believes the Food and Drug Administration could grant the vaccine an emergency use authorization early next year.
The analyst began hedging Moderna’s shares with a Buy rating and set a target price of $ 90. The stock was trading at $ 66.37 on Monday morning, up 6%.
Of the 14 analysts tracked by FactSet rated Modern, 13 rated it Buy, while one rated it Hold.
“We believe that billions in sales would be reasonable and there would be high demand in the first or second year,” Ye wrote. He estimates sales of the vaccine at $ 2 billion in the first year it is on the market, but said the number could be much higher.
Yee wrote that if Moderna’s Covid-19 vaccine is successful, it would validate the company’s wide variety of messenger RNA-based drugs, which are based on the same relatively unproven technology as the Covid-19 vaccine.
“This is the key: if it works, it’s not just about large amounts of money, but about validating the platform with a large amount of resources,” Yee wrote. “This is analogous to any biotechnology that shows that a platform works and can be applied across the board.”
Last week, Moderna’s actions fell on reports that disagreements with government scientists were delaying the start of the Phase 3 trial of its Covid-19 vaccine. At the time, Barron’s He noted that the reported disagreements highlight a potential risk for biotech companies that don’t have products marketed in the later stages of the vaccine career: They can be tested in depth in the fight for regulatory approval. Moderna said at the time that many of its employees had decades of industry experience and had executed Phase 3 programs at the “top five vaccine companies.”
Yee acknowledged that if the vaccine doesn’t work, the stock could be “hit hard.” But she wrote that “she believes the stock could appreciate from 25% to 50% in the next six to 12 months.”
Next steps for Moderna include the release of full data from the Phase 1 study of the Covid-19 vaccine, expected this month, and the start of the large Phase 3 study, which is also expected this month.
Write to Josh Nathan-Kazis at [email protected]
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