With the public desperate for a solution to COVID-19, Moderna’s (MRNA) status has increased to such an extent that any good news coming out of its HQ ripples across the whole market. Moderna can take partial credit for the S&P 500’s uptick on Wednesday, following news of the positive development in its COVID-19 vaccine program.
A study published in the New England Journal of Medicine showed that in the Phase 1 study of the biotech’s experimental vaccine mRNA-1273, all 45 patients produced antibodies to the coronavirus.
Moreover, participants who received two 100-microgram doses of the vaccine (patients were given either 250, 100, or 25 micrograms) produced antibody levels more than twice than those of people who had recovered from COVID-19. Antibodies are key in preventing the virus’ infection.
The good news sent Moderna shares rising again. Over the past week the stock is up by over 31% and overall, by 315% year-to-date.
While the data is no doubt positive, keeping a lid on expectations, Needham analyst Alan Carr said, “We view the data favorably, but note that immunogenicity data from subjects over 55 as well as more data around durability of immune response will provide more insight into potential utility of the vaccine.”
With a phase 2 study currently in progress, Moderna will begin a phase 3 trial of mRNA-1273 on July 27. Interim data from the Phase 3 study is expected to be released before the year’s end, and, therefore, Carr will “continue to assume the vaccine may be available around YE20.”
Moderna management said it remains on track to produce 500 million doses of the vaccine per year, and possibly up to 1 billion doses, beginning in 2021.
Despite the cautious approach, Carr has a “favorable view towards the vaccine,” and further said, “We continue to project revenue from mRNA-1273 in 2021+. We acknowledge the stock has performed well lately, but believe there is still upside opportunity for investors with a long-term perspective.”
Accordingly, Carr rates Moderna a Buy along with a $94 price target. Investors could be pocketing a 17% gain, should the analyst’s thesis play out over the coming year. (To watch Carr’s track record, click here)
Overall, the Needham analyst gets robust backing from the rest of the analyst community. 14 Buy ratings, and 2 Holds add up to a Strong Buy consensus rating. With an average price target of $94.15 - almost identical to Carr’s - the potential upside over the next 12 months is nearly 15%. (See Moderna stock analysis on TipRanks)
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