Moderna (NASDAQ: MRNA) stock has experienced an impressive 438% increase since the beginning of 2020. However, a recent announcement made during the company’s research and development (R&D) day on September 13th suggests that the best may still be yet to come.
The announcement highlighted the successful completion of phase 3 trials for Moderna’s flu vaccine and the upcoming submission of data for its respiratory syncytial virus (RSV) drug to regulators. In addition, Moderna announced a new phase 3 trial for its personalized cancer vaccine program in collaboration with Merck.
These developments have the potential to generate more revenue in the near future. Moderna’s management went a step further and provided investors with 15 additional reasons to be optimistic about the stock. Let’s take a closer look at these reasons and what they mean for the long-term success of the company.
Expanding Pipeline of Programs
Moderna’s coronavirus vaccine has been its primary revenue driver. However, the market for coronavirus vaccines is declining, and the demand for annual boosters remains uncertain. To prove it is more than a one-hit wonder, Moderna plans to broaden its pipeline significantly over the next five years, with around 50 new programs entering clinical trials. These programs will cover areas such as infectious disease, oncology, and rare diseases. Based on the average success rate for phase 1 candidates, shareholders can expect approximately seven additional products to reach the commercialization stage. However, it may take until the next decade for these products to generate revenue.
Additionally, Moderna has plans to launch up to 15 new medicines by 2030. Each of these medicines represents a solid reason to be bullish about Moderna’s long-term future.
Several programs, including Moderna’s cytomegalovirus (CMV) vaccine, personalized cancer vaccine, and therapy for propionic acidemia (PA), are currently in late-stage trials. Assuming regulatory approval, Moderna estimates it could generate up to $15 billion annually from sales of its respiratory vaccines alone by 2027. When combined with its other segments, the company’s total revenue could exceed the nearly $19 billion it earned in 2022.
Potential Challenges Ahead
While Moderna has a high chance of success and remains a prominent player in the vaccine market, there are risks to consider. Competition is increasing in the markets Moderna aims to enter. For example, Pfizer is already a competitor in the coronavirus vaccine market and received approval for its RSV vaccine earlier this year. Pfizer is also conducting phase 3 trials for a flu shot that uses a similar technology to Moderna’s, posing a risk to Moderna’s profitability.
Furthermore, there is a significant risk that some of Moderna’s pipeline programs may fail to demonstrate their safety and efficacy in clinical trials. Each failure could impact the company’s share price, particularly if it occurs in a closely watched program. However, Moderna’s competitors face similar risks.
Despite these challenges, Moderna has a robust lineup of potential successes, increasing the likelihood of achieving positive outcomes. The company also possesses ample resources to continue pursuing promising opportunities for drug development. Overall, Moderna is in a favorable position as a profitable biotech company.
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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck and Pfizer. The Motley Fool recommends Moderna. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
