Vaccine Backlog Raises New Questions About Moderna

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Don’t let the perfect be the enemy of the good. That’s the message Chris Gill, an infectious disease specialist at Boston University, told WBUR regarding the debate of implementing single-dose regimens for the messenger-RNA-based vaccines produced by Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE). This of course is to address the rising supply constraint issue of the vaccines, prompting a huge ethical argument. Certainly, it’s something to watch if you’re long MRNA stock.

The Moderna (MRNA) logo surrounded by syringes, pills and disposable face masks.
Source: Ascannio / Shutterstock.com

As you know, the marshaling of resources and talent to produce a vaccine – in record time, I should add – for the novel coronavirus was one of the few bright spots of an otherwise awful 2020. Indeed, it’s possible that history may look more favorably on the Trump administration (despite some glaring controversies) because of the Operation Warp Speed initiative. Naturally, this catalyzed MRNA stock to incredible heights.

Reality Sets In

But now that the honeymoon phase is over – did it ever really begin? – it’s down to brass tacks. The bottom line is vaccinating as many people as possible to prevent further unnecessary deaths.

Initially, MRNA stock jumped higher as encouraging efficacy data appeared to come in the nick of time against rising Covid-19 cases.

However, RNA vaccines come with a critical inconvenience. Specific, usually freezing, conditions are required to store them. Anticipating a supply shortage, several U.S. states raced to buy ultracold vaccine freezers, according to Reuters. Thus, even before the vaccine rollout, healthcare administrators were worried about the logistical challenges of mass-scale distribution.

As if these constraints amid record-high hospitalization rates weren’t enough, the debate centered on administering one dose instead of the manufacturer-recommended two doses. The proponents of this modulation make a compelling argument: why focus on maximum protection for some when you can get satisfactory protection for most?

MRNA Stock Loses a Key Tailwind

According to Gill, Moderna “was not shy about showing that a single dose was so effective, and they do the math right.”

Clinical research in Phase 3 trials shows Moderna’s vaccine, under a single-dose regimen, was around 80% to 90% effective. Naturally, such a result favors MRNA stock. I think most vaccine seekers will be just fine with the low end of the spectrum.

However, it’s unclear whether regulatory agencies across the world will authorize such changes to the original recommended regimen. After all, RNA vaccines are experimental. Prior to the Food and Drug Administration’s emergency use authorization, no nucleic-acid-based vaccines were approved.

Still, the thinking earlier last year was that the Covid-19 crisis, though otherwise completely awful, was an opportunity for the biotechnology industry to push new innovations in this field. Yet fast forward to today and we have a fundamental problem for MRNA stock and related investments. It appears there was a reason for the FDA’s cautiousness for experimental solutions.

New Questions Arise

Prior to the intense research and development process, everyone knew that the logistical disadvantage of RNA vaccines was the frozen storage requirement. However, a logistical advantage was ease and speed of manufacturing. A few years ago, CureVac (NASDAQ:CVAC) claimed that “RNA-based vaccines could be manufactured in less than two months at a lower production cost.” Surely, that must have played into Moderna’s/Pfizer’s authorizations.

So long as the safety profile was satisfactory, an authorization was always probable. With that profile meeting expectations, it was supposedly off to the races for MRNA stock.

But that’s just it. The manufacturing prowess just wasn’t up to snuff, apparently. According to the Washington Post, a contributing factor to the Moderna/Pfizer vaccine supply bottleneck is that “they’re being produced more slowly than hoped.”

Therefore, the only logistical advantage for RNA vaccines is that they might be cheaper than other approaches. But this experimental solution was said to be transformative. New questions are now clouding MRNA stock.

Should Stakeholders Sell Moderna?

Years before the coronavirus, advocates of RNA vaccines argued that because of the approach’s rapid-scale manufacturing capability, it was “possible to respond to epidemics even as they develop. Therefore, RNA-based vaccines offer a comparatively simple and rapid solution to unpredictable, rapidly evolving pathogens.”

Well, that’s the difference between laboratory science and applied science. If I may, this teaches us a lesson about experimental anything, such as solid-state batteries for electric vehicles. Until you have real-world tests, you just can’t make too many assumptions about platform reliability.

And that’s the problem for MRNA stock. Yes, its underlying solution is what we have and we’re going to work with it. However, one of its major attributes may not really be all that impressive. In other words, it’s failing under crunch time. This might explain the shares recent correction.

At this point, stakeholders who are already profitable may want to consider taking some off the table. With competition around the corner, the narrative for MRNA stock is conspicuously less exciting.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.


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