Since Moderna (NASDAQ:MRNA) and BioNTech SE’s (NASDAQ:BNTX) Covid-19 vaccine became available to some members of the public, rival Moderna (NASDAQ:MRNA) might have felt like a second-place finisher. To make matters worse, Moderna stock faltered in mid-December.
Still, the pullback in Moderna stock and Pfizer’s vaccine rollout shouldn’t discourage investors. For one thing, a long-term perspective indicates that Moderna shares have done well overall in 2020.
Besides, price corrections should be viewed as buying opportunities if you believe in the company. Is it possible, then, that there’s room for more than one winner in the Covid-19 vaccine horse race?
A recent development does indeed suggest that Moderna could be hot on the heels of Pfizer and any pullbacks in the Moderna stock price ought to be viewed as a gift from the markets.
A Closer Look at Moderna Stock
In the interest of fairness, I’ll start this section with a warning. It’s important to note that Moderna stock has trailing 12-month earnings per share of -$1.63.
That’s not horrendous for a stock in the $140 area, but the bulls will want to see that figure turn from negative to positive in the near future.
So, let’s address the recent price dip. Due to an abundance of vaccine hope and/or hype, Moderna stock rocketed up from $67 and change in early November to a breathtaking 52-week high of $178.50 in December.
A rational mind would conclude that this move was too far, too fast. Consequently, a retracement was warranted. As of Dec. 18, Moderna stock settled at $140.23.
That seems like a more reasonable price as evidently the stock needed to take a breather. Moreover, a fresh news item could easily provide fuel for a turnaround in Moderna stock.
Thank You, FDA and Fauci
Without further ado, here’s the big news. On Dec. 18, the U.S. Food and Drug Administration (FDA) officially issued a highly coveted Emergency Use Authorization (EUA) for Moderna’s Covid-19 vaccine.
None other than National Institute of Allergy and Infectious Diseases Director and pandemic czar Anthony Fauci announced the imminent distribution of Moderna’s vaccine to select patients in the U.S.
At the same time, Fauci wisely cautioned, “We can’t just say, ‘Well, there’s a vaccine on the horizon, so let’s forget about everything else.’” Thus, Americans should continue to wear masks, practice social distancing and generally avoid gatherings.
Even with that warning duly noted, Moderna stock investors should breathe a sigh of relief. The much-needed regulatory approval is a key milestone as Moderna seeks to keep pace with well-capitalized Pfizer.
Second-Place Moderna Was Actually First
Before Pfizer investors dismiss Moderna as an also-ran in the Covid-19 vaccine race, let’s take note of an important historical fact.
It was actually Moderna, not Pfizer, that was the first company to begin clinical trials for a Covid-19 vaccine. In fact, Moderna started the process a mere 63 days after the virus was sequenced from China.
Heath and Human Services Secretary Alex Azar set the record straight.
“On January 7, before China had reported even one death from the novel coronavirus or confirmed human-to-human transmission, he said. “NIH scientists and innovators at Moderna agreed to begin work on the vaccine that received FDA authorization today.”
Speaking of setting the record straight, it’s worth clarifying that President Trump’s tweet displayed due enthusiasm but might not be entirely accurate: “Moderna vaccine overwhelmingly approved. Distribution to start immediately.”
The word “immediately” may be considered a slight exaggeration. The distribution of Moderna’s Covid-19 vaccine will likely involve a delay of at least several days.
But let’s not quibble over the timing. More importantly, Moderna intends to deliver around 20 million doses of its Covid-19 vaccine by the end of the month. The rollout will be massive, and potentially lifesaving.
The Bottom Line
The reasonable conclusion from all of this is that there is, indeed, room for multiple winners in the Covid-19 vaccine race.
And given the terrific news from the FDA, Moderna stock traders should know that being in second place isn’t so bad, after all.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
