The race to be first to market with a COVID-19 vaccine is changing gears. As the companies developing vaccine/therapeutics move further down the development path, the commercial aspect is starting to take a more prominent part in the conversation.
mRNA vaccine maker Moderna (MRNA) is one of the companies currently leading the pack, but it needs to be vigilant of rivals’ progress. Shares of Moderna hit a speed bump on Wednesday and trended downwards on account of positive developments in the progress of rivals Novavax (NVAX) and Johnson & Johnson’s (JNJ) respective COVID-19 vaccine programs.
Novavax’ candidate NVX-CoV2373 performed well in a phase 1 study and drew positive responses from several Street analysts. While J&J’s pricing ($10 per dose in its deal with the U.S. government) might put pressure on Moderna to significantly reduce the $32 to $37 per dose price range its small volume deals have bought in so far for mRNA-1273, its COVID-19 vaccine candidate.
Nevertheless, so far, Moderna’s candidate is making its way smoothly through the clinical trial process.
And that is where the key focus lies. Should the company report positive data from the recently initiated Phase 3 mRNA-1273 trial, then the rules of the game will change in its favor. This is a point picked by Oppenheimer analyst Hartaj Singh. The 5-star analyst believes Moderna is well positioned to build on the several agreements it has already made to supply $400 million’s worth of the potential vaccine.
Singh opined “As the global community now sets its sights on potential late-stage COVID-19 vaccine data over the coming quarters, a greater share of the conversation has shifted toward commercialization and pricing… While MRNA navigates vaccine supply agreements and a potential commercialization of mRNA-1273, we anticipate volatility in the shares to continue. Nonetheless, clinical updates from P2 and eventually P3, in parallel with a further clarified regulatory path to approval, position MRNA well over the coming 12-18 months, in our view.”
Accordingly, Singh keeps his Outperform (i.e. Buy) rating as is, along with a $108 price target. What does it mean for investors? Upside potential of 47% from current levels.
The rest of the Street concurs. 12 Buy ratings and 3 Holds coalesce to a Strong Buy consensus rating. With an average price target of $92.54, the analysts forecast upside of 28% over the coming months.