Moderna’s stock plummets despite ‘Vaccine Day’ with 31 new recordings and $21 billion in sales — here’s why

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Despite Moderna hosting an investor seminar on Thursday touting the company’s growing vaccines pipeline and soaring sales, shares of the Cambridge, Mass.-based company’s long-term profitability of its Covid-19 vaccine earnings tumbled.

Important facts

Shares of Moderna fell as much as 8% on Friday to around $165, paring recent gains that helped offset a nearly 60% plunge as Covid vaccination rates flattened over the past six months.

The latest drop comes a day after Moderna held its third annual “Vaccine Day,” where investors discussed its growing pipeline of 31 vaccines — including some for certain Covid variants, seasonal flu, HIV and herpes — and study results, among other things could share data.

Although new orders from Japan and Colombia helped Moderna boost its expected sales of Covid vaccines to $21 billion this year from $19 billion, the company also shared phase 2 study data for its flu vaccine candidate, which showed only “similar” effectiveness to standard flu shots, making it difficult to say whether the candidate is “necessarily better,” Jefferies analysts said Friday.

Other analysts have been harsher on the data, with SVB Leerink’s Mani Foroohar calling the results a “non-starter for the influenza market” both commercially and clinically, saying any advancement of the candidate would be a “bad use” of Moderna’s resources.

Though several analysts have lauded Moderna’s efforts to develop vaccines against latent, or dormant, viruses — including cancer, multiple sclerosis and congenital deafness — some respected investors are still focused on the company’s Covid offerings.

Morgan Stanley, which has a $170 price target for Moderna shares, indicated that UN’s Covax is unlikely to exercise its option to purchase additional doses until April 1 while lawmakers are in the US struggling to secure additional Covid funding

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One of the most optimistic Moderna analysts on Wall Street, Piper Sandler’s Edward Tenthoff, issued a price target of $348 for shares following the company’s investor presentation, a more than 100% increase from current levels. The company’s Covid vaccine is a “financial windfall” that bodes well alongside a “dramatically expanded” pipeline, Tenthoff said.

Crucial quote

“There is no denying that the company’s significant advances in vaccine modality have been made…some of them [candidates] could prove key to how the story unfolds in the medium to long term,” JP Morgan analyst Cory Kasimov wrote in a note on Thursday. “But in the short term, we suspect investor focus will remain on the sustainability of Covid-19.”

key background

Covid-19 vaccines have proven highly effective at preventing serious illness and hospitalizations, but experts have increasingly warned that overly high sales expectations set last year may not be sustainable as the pandemic wanes. Even after a recent rebound, Moderna shares are down 66% from an all-time high of $497 hit in August. In a note during the slump, Jefferies analyst Michael Yee said the stock decline helped bring Moderna’s valuation in line with that of other biotechnology peers, but he noted that analysts are increasingly expecting the selling of Covid vaccines – currently Moderna’s only source of revenue from a commercialized product – will decline over the next few years as the pandemic becomes endemic and competition between treatment and prevention options intensifies.

What to look out for

“We see every wave [of infections] in 2022 to potentially spur a resurgence in stocks, but interestingly, we think investors really want the stock to not be as volatile around Covid and instead find value from the rest of the pipeline,” Yee said Thursday.

Big number

$18.5 billion. That’s how much revenue Moderna reported last year after shipping around 807 million vaccine doses worldwide, skyrocketing from $803 million in 2020.

Further reading

Moderna stock crash: Over $140 billion in losses as insiders sell millions of dollars in shares (Forbes)

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