When the government’s on your side, you’re in a very good position. This is true for biotech companies and is equally true for stock-market investors. It’s a concept that applies to Moderna (NASDAQ:MRNA) today as the company works diligently to develop a vaccine for the novel coronavirus.
Market watchers might object that MRNA stock has already posted strong gains. Specifically, it shot up from $18 and change in February to the $50 level in April. And yes, there’s no denying that this represents a sizable price move.
However, given the company’s recent good news, it’s reasonable to conclude that the stock still has room to run. Moderna has an edge over other other biotechnology companies seeking to develop a Covid-19 vaccine. If Moderna is the first one to get its vaccine approved and bring it to the open market, MRNA at $50 would be a steal, though it wouldn’t likely be at that price level anymore.
A Science-Based Solution
The fact that Moderna’s stock ticker symbol is MRNA is not happenstance. That combination of letters represents a very important part of what makes Moderna a standout among biotech firms.
You’ve probably heard of DNA, or deoxyribonucleic acid. That’s what stores genetic “codes” or instructions inside of the cells in your body. DNA also helps your body make proteins.
Moderna’s scientific solutions are chiefly based on mRNA, which is related to DNA. mRNA, or messenger ribonucleuc acid, is “a single-stranded molecule that carries genetic code from DNA in a cell’s nucleus to ribosomes, the cell’s protein-making machinery.”
And so, mRNA is needed for your body to synthesize the proteins and use the genetic codes developed by your DNA. What sets Moderna apart from the sea of biotech companies is that the company leverages the power of mRNA to address a broad spectrum of conditions.
As you might expect, the coronavirus is among those targeted conditions. In Moderna’s product pipeline is mRNA-1273, a prophylactic vaccine for Covid-19. Currently, mRNA-1273 is in Phase 1 trials.
If mRNA-1273 is proven to be safe, the company intends to commence a Phase 2 study during 2020’s second quarter. Furthermore, Moderna stated that a Phase 3 study for mRNA-1273 could start as early as this fall.
The Big Catalyst
If the company’s exciting mRNA-based initiatives weren’t enough to push the MRNA stock price to $50, then it was a game-changing news item that put it there. So, what was the big catalyst? It was a $483 million grant from the U.S. government for mRNA-1273 testing and development.
To be exact, the grant comes from a component of the U.S. Department of Health and Human Services known as the Biomedical Advanced Research and Development Authority, or BARDA.
The funding from BARDA will help Moderna in its development and scaling up of mRNA-1273 this year. The company intends to provide millions of doses of this prospective coronavirus vaccine each month throughout 2020. Beyond that, Moderns expects to produce and supply tens of millions of mRNA-1273 doses every month next year.
And while so many companies in the U.S. are cutting their workforces, Moderna is preparing to starting hiring. In fact, the company intends to bring 150 more employees on board this year in the U.S. so that it can expand its ability to manufacture its potentially life-saving products.
Noting that “Time is of the essence to provide a vaccine against this pandemic virus,” Moderna CEO Stephane Bancel expressed gratitude, saying, “We are thankful for BARDA’s support to fund the accelerated development of mRNA-1273, our vaccine candidate against SARS-CoV-2.”
Shareholders should be grateful as well. This is the type of catalyst that could provide wealth for MRNA stockholders along with a solution for the coronavirus crisis.
The Final Word on MRNA Stock
The price increase in MRNA stock doesn’t mean that you should hesitate to own the shares. With government funding providing an undeniable catalyst, expect progress from Moderna’s research labs and higher prices in the shares this year.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
