$100 billion market cap is the blue-sky scenario for Moderna, analyst says

By | February 25, 2021

Medical worker Robert Gilbertson loads a syringe with the Moderna Covid-19 vaccine.

APU GOMES | AFP | Getty Images

Biotech and pharmaceutical company Moderna, a forerunner in the development of coronavirus vaccines, has the potential to reach a $ 100 billion-plus market capitalization, according to one analyst.

Asked what the blue-sky scenario could be for Moderna, whose coronavirus vaccine was found to be 94% effective at preventing serious Covid infection, and who is already working on a booster shot to tackle the variant that first emerged in South Africa, Hartaj Singh, managing director and senior analyst of biotechnology at Oppenheimer, told CNBC Thursday said that similar companies’ sales trajectories showed what Moderna could experience in future.

“What we do is point people to other companies in the biotech sector that have peaked or hit a valuation when they launched their first set of products. Companies as diverse as Alexion, Regeneron and Vertex, currently, and they essentially peaked at about ten times future sales, future sales being three to five years out.”

“I think with Moderna’s coronavirus vaccine franchise, and they’re also starting to develop flu vaccines which should hit the market in the next couple of years … you know, we could see a $ 10 billion franchise five to seven years from now. If you put a ten times sales multiple on that then, you can do the math, then it’s a $ 100 billion-plus market cap company,” he told CNBC’s “Street Signs Europe.” Its market value is currently just above $ 57 billion.

Moderna‘s shares rose 3% in premarket trade Thursday as its fourth-quarter revenue, of $ 571 million, vastly exceeded estimates of $ 318.9 million, and compared to $ 14 million for the fourth quarter of 2019.

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It also forecast $ 18.4 billion in Covid-19 vaccine sales in 2021, having brought in $ 199.87 million Covid-19 vaccine sales in the fourth quarter.  The company did, however, report a quarterly share loss of 69 cents, more than the 35 cent loss that analysts were anticipating.

In the earnings statement, CEO Stephane Bancel said 2020 was a historic year for Moderna and that 2021 would be an “inflection year” for the company.

“We previously believed that mRNA would lead to approved medicines, and we were limited in our ambitions by the need for regular capital raises and keeping several years of cash to manage financing risk. We now know that mRNA vaccines can be highly efficacious and authorized for use, and we are a cash-flow generating commercial company,’ he said.

“We plan to accelerate and significantly increase our investments in science and grow our development pipeline faster. By executing on our 2021 priorities, we will advance our mission of delivering on the promise of mRNA science to create a new generation of transformative medicines for patients. This is just the beginning,” he said.

Booster shot

The drugmaker announced Wednesday that it is set to begin trials of its new Covid-19 vaccine booster shot, designed to give better protection against a new variant of the virus first discovered in South Africa. The biotech firm said it had shipped doses of the shot to the U.S.’ National Institute of Health for testing.

Moderna’s current two-dose jab provokes a weaker immune response against the South African strain of the virus, found to be more infectious than other variants, though the company said antibodies in patients remain above levels that are expected to be protective against the virus.

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“Moderna is committed to making as many updates to our vaccine as necessary until the pandemic is under control,” Bancel said in a press release. “We hope to demonstrate that booster doses, if necessary, can be done at lower dose levels, which will allow us to provide many more doses to the global community in late 2021 and 2022 if necessary.”

Separately, the company also announced Wednesday that it expects to produce up to 700 million doses in 2021 and 1.4 billion Covid-19 vaccine doses in 2022, on the assumption the vaccine will be administered at its current level of 100 micrograms.

If the vaccine is found to be effective at a lower dosage level, the company said it could supply up to 2.8 billion doses in 2022. Moderna has a deal with the U.S. government to supply 300 million doses. 

Disclaimer: Hartaj Singh does not have any holdings of Moderna’s stock.

– CNBC’s Berkeley Lovelace contributed reporting to this story.

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