Massachusetts-based Moderna (NASDAQ: MRNA) is one of the only stocks soaring, while most everything else is trawling the bottom of the sea. Biotech is one of the hottest sectors to watch right now as the race to create a coronavirus vaccine is making investors sit up and take notice. Within the space, Moderna is coming out ahead of the pack with its recent announcement that it’s started testing a vaccine last Monday.
The biotech’s shares have surged up over 52 percent in the last month, outpacing the medical industry’s 22 percent loss while the Dow Jones’ declined 30 percent. The science behind the firm’s current success is a little molecule called messenger RNA (mRNA). As Moderna explains it, “mRNA plays a fundamental role in human biology, transferring the instructions stored in DNA to make proteins required in every living cell. Our approach is to use mRNA medicines to instruct a patient’s own cells to produce proteins that could prevent, treat, or cure disease.”
MRNA shares show strong performance over the past twelve months, and its phase 1 testing has sent them skyrocketing in the last week. The firm is also preparing to put a request before the Food and Drug Administration for permission to move forward with phase 2. Currently, there are twenty-four mRNA candidates, and twelve of them are being trial-run in ongoing clinical studies. The firm is working in collaboration with the National Institutes of Health on the coronavirus and 1,700 people are enrolled in the phase 1 drug trials.
“This study is the first step in the clinical development of an mRNA vaccine against SARS-CoV-2, and we expect it to provide important information about the safety and immunogenicity (the ability to provoke an immune response in the body),” Zaks said in a written statement.
But developing a vaccine for the coronavirus won't be an overnight affair, and investors should consider that it won't necessarily be quick money. But mRNA has many potential applications, including a vaccine for CMV, which is a significant contributor to congenital disabilities in the United States. It affects an estimated 25,000 newborns each year – between 10 to 30 percent of those babies with severe CMV will die before their first birthday.
Moderna's current market cap sits at approximately $11 billion, and while future revenue from vaccine sales is difficult to forecast, its potential sales increases sit in the 150 percent range. A number of analysts that cover Moderna pinpoint the share’s value at $32.57 while it currently sits at $28.20 as of Friday’s closing. The biotech received over $1.8 billion in capital over ten funding rounds before going public in late 2018.
Photo by Fusion Medical Animation on Unsplash
Sources:
https://seekingalpha.com/article/4332654-why-moderna-shares-upside-ahead
https://www.marketwatch.com/story/the-dow-is-on-pace-for-its-worst-month-since-the-great-depression-but-heres-why-all-hope-isnt-lost-amid-the-coronavirus-stock-rout-2020-03-21?mod=mw_quote_news
https://www.nasdaq.com/articles/firm-up-your-anti-coronavirus-holdings-with-moderna-stock-2020-03-19
https://www.investors.com/news/technology/mrna-stock-rockets-biotech-doses-first-patient-coronavirus-vaccine-test/
https://finance.yahoo.com/news/moderna-mrna-stock-moves-0-214509619.html
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
