With a Phase 2 study currently in progress, and a Phase 3 trial of mRNA-1273 set to begin on July 27, Oppenheimer analyst Hartaj Singh sees a difficult road ahead, but remains optimistic.
“The MRNA assessment, in our opinion, reflects an approval and rapid acceptance of mRNA-1273, in line with other historical biotech compilations. Price dynamics, possible donation of free vaccine, and distribution of mRNA-1273 are non-trivial issues. We believe these can be navigated, but traffic can be choppy. As a leader in the COVID-19 vaccine space, we continue to find MRNA attractive, ”said the 5-star analyst.
If mRNA-1273 gets approval, which is by no means a certainty and Singh gives it a 50% chance of success, it is expected to generate sales of $ 5 billion by 2023. However, for that to become actually, there are “Lots of obstacles MRNA needs to navigate in the next 3-6 months.”
These obstacles include the price of the medicine. Other big pharmaceutical names like Johnson & Johnson and AstraZeneca have said they could distribute their vaccines “at cost” as the virus continues. Furthermore, with Moderna’s use of equity capital to produce “at risk” mRNA-1273, this means that “threading the pricing needle for mRNA-1273 will require finesse.” Add to the mix the possibility that the vaccine could be donated to developing countries, as Gilead has done with its viral treatment, remdesivir, and the price becomes even more complicated.
Finally, there is distribution logistics. Singh believes that Moderna “will work closely with United States government and international agencies to distribute mRNA-1273 equitably,” and may even be looking for a partner to work with on the commercial side.
Despite the variables, overall, Singh concludes that these are “high-quality issues, and we continue to find MRNA attractive.”
What does the rest of the street think of the prospects for high-flying biotechnology? Based on 13 purchases and 3 reserves, Moderna has a strong buy consensus rating. Additionally, the average price target of $ 93.79 implies upside potential of 17%. (See Moderna stock analysis at TipRanks)
