Vaccine stocks were some of the most rewarding opportunities of 2020.
- Pfizer (NYSE:PFE) ran from a March low of $25.40 to a high of $43
- BioNTech (NASDAQ:BNTX) ran from $30 to $131
- Novavax Inc. (NASDAQ:NVAX) ran from $8 to $85
- Moderna (NASDAQ:MRNA) ran from about $18 to a high of $178.50
While most slipped on a “sell the news” reaction, there’s still plenty of opportunity to be found. In fact, I’d use weakness in the MRNA stock to buy.
Near term, I’d like to see it back to $180 on a few key catalysts.
For One, Millions Are Still in Need of Vaccines
At the moment, there are 82.9 million cases of the novel coronavirus. In the U.S., the case load is up to 19.7 million. In India, it’s up to 10.2 million. Brazil is up to 7.6 million. Russia is up to 3.1 million. France is up to 2.6 million, with the UK nearing 2.5 million.
Worse, there’s a new strain of the virus in the UK, Colorado, and in California. Plus, according to Dr. Anthony Fauci, we could see reports from other states.
“We predicted it would be, when you have so much of it in the UK, which then spread to other countries in Europe and Canada, it was inevitable that it would be here,” he said, as quoted by the New York Post. “You’ll be hearing reports from other states and more cases in the state that is already reported. Unfortunately, that’s just the reality of the way these viruses spread.”
If that’s the case, we may need far more vaccine supply. Plus, no one is quite sure when everyone will get the first round of vaccines. Then, we have to be concerned with how long the vaccine may actually last after being administered. Is it one shot and we’re done?
There’s also a possibility of frequent Covid-19 vaccinations. At this point, all we know is the world must have more vaccine supply.
Two, Moderna Could See Billions for its Vaccine
In recent weeks, the FDA authorized Moderna’s vaccine for use across the U.S. This was after the agency found it to be 94% effective in preventing the virus.
That alone could open a windfall opportunity for Moderna. In fact, as reported by Motley Fool contributor Keith Speights, Bernstein analyst Ronny Gal says the vaccine market could see $40 billion in New Year 2021.
The analyst also believes Moderna could see $1.5 billion in the first quarter for its vaccine, increasing to $3.5 billion by the third quarter. For the full-year, the analyst says it could see up to $11 billion. Plus, over the next five years, it could be up to $20 billion.
Three, Moderna Just Published Phase 3 Trial Results
The company just announced that interim safety and primary efficacy results from Phase 3 trails were published in the New England Journal of Medicine. Reportedly, it’s two-dose vaccine, given 28 days apart was well tolerated with efficacy of 94.1%.
The company is also conducting a Phase 2/3 study of the vaccine in children 12 to under 18. More studies are expected for pregnant women, children younger than 12, and those considered immune-compromised.
The Bottom Line on MRNA Stock
Use weakness as opportunity for the MRNA stock.
While most vaccine stocks, like MRNA stock, slipped on a “sell-the-news” reaction, there’s still plenty of opportunity to be found. Near term, I’d like to see it back to $180 on a few key catalysts.
Remember, we have no idea what’s happening with the virus.
It’s now mutating and starting to run amok. It could mutate again. No one knows. No one even knows if we’ll need multiple doses of vaccines going forward.
As Donald Rumsfeld once said, “There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.”
All we know is that vaccines will remain under substantial demand.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A contributor to InvestorPlace.com, Ian Cooper has been analyzing stocks and options for web-based advisories since 1999.
