U.S. Stock Market

Moderna Receives Additional $472 Million from BARDA for COVID-19 Vaccine; Target Price $90

Moderna Inc, an American biotech company focused on drug discovery, said that the U.S. government’s Biomedical Advanced Research and Development Authority (BARDA) has committed an additional $472 million in funding to support scaling up of manufacturing and clinical development of its novel coronavirus vaccine.

That additional commitment would support late-stage clinical development including the expanded Phase 3 study of the Company’s mRNA vaccine candidate (mRNA-1273) against COVID-19.

The total value of the award is now approximately $955 million from the BARDA, including $483 million which the U.S.-based drugmaker received in April.

Moderna said it remains on track to be able to deliver approximately 500 million doses per year and possibly up to 1 billion doses per year, beginning in 2021 from the company’s internal U.S. manufacturing site and strategic collaboration with Lonza.

Britain’s AstraZeneca Plc, Novavax Inc and Pfizer Inc, have also received funding from BARDA to support the rapid development of vaccines to prevent COVID‑19.

Executive comment

“Encouraged by the Phase 1 data, we believe that our mRNA vaccine may aid in addressing the COVID-19 pandemic and preventing future outbreaks. We thank BARDA for this continued commitment to mRNA-1273, our vaccine candidate against COVID-19,” said Chief Executive Officer Stéphane Bancel.

Moderna stock forecast

Seventeen analysts forecast the average price in 12 months at $91.87 with a high forecast of $134.00 and a low forecast of $65.00. The average price target represents a 25.49% increase from the last price of $73.21. From those 17, 13 analysts rated ‘Buy’, four rated ‘Hold’ and none rated ‘Sell’, according to Tipranks.

Morgan Stanley target price is $90 with a high of $279 under a bull scenario and $7 under the worst-case scenario. Several other equity researches have also recently upgraded their stock outlook for Moderna. SVB Leerink initiates with market perform, $65 price target; JP Morgan lowered its rating to ‘Neutral’ from ‘Overweight’, raised target price to $89 from $60 and downgraded shares on valuation. Moderna had its target price raised by Piper Sandler to $134 from $100.

We think it is good to buy at the current level and target at least $90 in the short-term and $112 in a bull-case scenario as 50-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

Analyst view

“We are Overweight Moderna. The company has taken an industrialized approach to developing mRNA based therapeutics and has rapidly generated a broad pipeline of 21 programs, 11 of which have entered clinical development. We believe Moderna’s mRNA drug development platform is more diversified and scalable compared with competitors, and is validated through broad partnerships with Merck and AstraZeneca,” said Matthew Harrison equity analyst at Morgan Stanley.

“The COVID-19 vaccine programs provide a significant acceleration of the path to commercialization and validation of the Moderna platform. We are positive on the early data and look forward to the progress. We see vaccines and rare diseases as the key valuation drivers of the company. We derive our PT from a DCF based on our forecasts of Moderna’s mRNA based product candidates through 2040E. We use a 12.5% discount rate and a 2% terminal growth rate.

Upside and Downside Risks

Meeting timelines and continuing to expand a diversified pipeline; Supporting clinical data across several modalities; Launch vaccines in multiple indications including CMV and COVID-19, Morgan Stanley highlighted as upside risks to Moderna.

Efficacy and/or safety concerns cause investors to write-off subsequent readouts across additional modalities. Delays in Moderna’s ability to generate significant clinical data. Stronger than expected competitor data, Morgan Stanley highlighted as downside risks.