The race to bring a novel-coronavirus vaccine to the public is heating up and making headlines practically on a daily basis. Moderna (NASDAQ:MRNA) reflects the public’s intense desire for a vaccine, but the price of MRNA stock has pulled back since mid-May.
The pullback doesn’t mean that there’s something wrong with the company itself. Biotechnology stocks have generally followed a pattern of overshooting and then retracing somewhat.
If anything, the retracement is another chance to start a position in MRNA stock. Or, it could present an opportunity to add to your position if you already own shares of the stock.
Recent positive developments justify optimism that the share price will return to its previous high point. And it’s better to take a position before a vaccine is found. Otherwise, the price of entry could be much higher than it is today.
A Mover of Markets
More than most stock-market sectors, biotechnology stocks are particularly sensitive to news developments. The emergence of Covid-19 has only heightened this sensitivity among biotech-stock traders.
It has gotten to the point where news about a single biotechnology company can move the entire stock market. This phenomenon was demonstrated on May 18. That’s when the value of MRNA stock increased by 20% as Moderna published a press release with positive interim Phase 1 data for the company’s Covid-19 vaccine known as mRNA-1273.
On that same day, the S&P 500 advanced 3.2%. There wasn’t much else going on to account for the broad-market jump besides Moderna’s press release. So now, it’s fair to say that Moderna isn’t just a household name among stock traders. It’s also a potential market mover now.
Consider how much MRNA stock could move the markets if Moderna is the first company to discover a Covid-19 vaccine, obtain regulatory approval for it and make it available to the public.
There’s no guarantee that Moderna will be the first biotechnology company to achieve this. However, the preliminary results are encouraging. Moderna Chief Medical Officer Tal Zaks concisely summed up the findings:
“These interim Phase 1 data, while early, demonstrate that vaccination with mRNA-1273 elicits an immune response of the magnitude caused by natural infection starting with a dose as low as 25 µg … [Moderna believes] that mRNA-1273 has the potential to prevent COVID-19 disease and advance our ability to select a dose for pivotal trials.”
Preparing to Meet the Demand
And so, Moderna is clearly very confident in its ability to develop a Covid-19 vaccine. However, there’s also the issue of getting the vaccine to the public in an efficient manner. Upon finding a vaccine, Moderna would face enormous pressure to produce the vaccine as quickly as possible.
A recent collaboration agreement should quell any investor concerns about Moderna’s ability to supply a vaccine. A recent press release confirmed that CordenPharma, a pharmaceutical-manufacturing platform, will provide “large-scale volumes” of lipids for mRNA-1273.
Evidently, CordenPharma is prepared to scale the production as needed. “The expanded agreement will begin immediately in order to rapidly meet Moderna’s increasing demand over the upcoming months, with an emphasis on securing their future long-term supply,” commented CordenPharma.
With this key piece of the supply puzzle in place, Moderna remains among the most likely biotechnology companies to be first to market with a Covid-19 vaccine. The next step for Moderna will be Phase 2 trials for mRNA-1273. These trials are expected to commence soon.
The Final Word on MRNA Stock
Along with the positive preliminary data, the CordenPharma connection is yet another reason to own MRNA stock. Of course, it’s certainly possible that another firm will be first to market with a Covid-19 vaccine. But if you’re going to have a horse in the race, Moderna looks like a strong contender right out of the gate.
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.
