Prior to the onset of the novel coronavirus, drugmaker Moderna (NASDAQ:MRNA) wasn’t really a household name. Today, the company is quite famous and Moderna stock is heavily traded on Wall Street.
You, or someone you know, might already have been administered a dose or two of Moderna’s Covid-19 vaccine, known as mRNA-1273. The “mRNA” part presumably stands for messenger RNA, which the basis for the vaccine’s mechanism of action against Covid-19.
I’m not trying to imply that Moderna wasn’t a successful company prior to the onset of the novel coronavirus. The company actually had revenues of $60.2 million in 2019.
Yet, the Covid-19 vaccine rollout has the potential to generate an absolute windfall for the company and its stakeholders. The only question, then, is whether investors should consider buying shares of Moderna stock now.
A Closer Look at Moderna Stock
It’s definitely not an exaggeration to say that Covid-19, while tragic, had the effect of boosting the Moderna stock price substantially.
I’ll put it to you this way. At the end of 2019, Moderna stock was trading at around $19 per share. Few people on financial message boards seemed to care much about the company or the stock.
By the summer of 2020, the bulls were threatening to push the Moderna stock price above $100. It was a buying frenzy of epic proportions, and the story doesn’t end there.
Also, there was a share-price dip in September as Moderna stock fell to the $60 area. Yet, as it turned out, this proved to be a prime buying opportunity.
At the end of January, Moderna stock landed at $173.16, which was fairly close to its 52-week high. So, don’t count on the stock coming back to its pre-Covid-19 levels anytime soon as the bulls are firmly in control of the price action.
A Global Vaccine Maker
In the Covid-19 vaccine development race, it could be said that there’s a duopoly in effect, and by this, I mean that there are two main competitors dominating the field, to the exclusion of practically all other companies that are trying to compete.
Of course, Moderna’s rival in this duopoly is Pfizer (NYSE:PFE). There’s no denying that Pfizer is world-famous, well-capitalized and trusted among drug manufacturers.
Still, it must be nice to have only one chief rival in a multi-billion-dollar market. And don’t think that Moderna is just standing by and letting Pfizer steal its market share.
Indeed, Moderna is proving itself as a global player in the vaccine rollout race. In December, Canada and Europe both doubled their purchases of Moderna’s Covid-19 vaccine.
Moreover, Moderna recently struck deals with pharmaceutical firms in Sweden and Spain. With the help of its partners, Moderna intends to produce a mind-boggling 1 billion doses of its Covid-19 vaccine in 2021.
Biden’s Buy Order
But what about the U.S. in particular? Can Moderna effectively compete with Pfizer on its home turf?
Without a doubt, the answer is yes. In a move that’s bound to solidify the Pfizer-Moderna duopoly, President Joseph Biden just ordered 100 million Covid-19 doses from each of the two drugmakers.
By ordering the same number of doses from each of the two companies, Biden seems to be indicating that the government isn’t favoring one company over the other.
That’s great news for Moderna stock holders as they may have previously felt that Moderna was the runner-up to Pfizer in the vaccine rollout race.
Plus, it appears that Biden probably isn’t planning to order Covid-19 vaccines from other companies. Referring to the new orders from Pfizer and Moderna, Biden said, “It will be enough to fully vaccinate 300 million Americans to beat the pandemic.”
The Bottom Line
We could debate all day long on the topic of whether there ought to be a duopoly in the U.S. Covid-19 vaccine rollout.
But as an investor, we have to accept the facts as they are. With Biden’s new vaccine-dose order, Moderna stock holders should know that the duopoly – and a windfall of revenues – will be assured.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
