Moderna

Moderna Shares Jump Over 15% After COVID-19 Vaccine Proves 94.5% Effective; Target Price $136

Moderna Inc, an American biotech company focused on drug discovery, said the Phase 3 study of mRNA-1273, its vaccine candidate against COVID-19, showed that it was 94.5% effective in preventing COVID-19, sending its shares up over 15% in pre-market trading on Monday.

This comes just after Pfizer and BioNTech announced last week that the first interim efficacy analysis from the phase-3 study found their jointly developed mRNA-based vaccine candidate to be over 90% effective in preventing COVID-19 among participants.

Based on these interim safety and efficacy data, Moderna said it will submit for an Emergency Use Authorization with the U.S. Food and Drug Administration in the coming weeks.

“This de-risk the platform and should increase visibility on a potential ‘best in class’ vaccine. This is at least line w/topline results from the PFE study which was above 90%. Next big event is whether other vaccines that are not mRNA-technology based can show these very strong initial results,” said Michael J. Yee, equity analyst at Jefferies.

Following this announcement, Moderna shares surged more than 15% to $102.88 in pre-market trading on Monday; the stock is up over 400% so far this year.

Executive Comments

“This is a pivotal moment in the development of our COVID-19 vaccine candidate. Since early January, we have chased this virus with the intent to protect as many people around the world as possible. All along, we have known that each day matters,” said Stéphane Bancel, Chief Executive Officer of Moderna.

“This positive interim analysis from our Phase 3 study has given us the first clinical validation that our vaccine can prevent COVID-19 disease, including severe disease,” Bancel added.

Moderna Stock Price Forecast

Eleven equity analysts forecast the average price in 12 months at $100.00 with a high forecast of $136.00 and a low forecast of $88.00. The average price target represents an 11.87% increase from the last price of $89.39. From those 11 analysts, nine rated “Buy”, one rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $100 with a high of $335 under a bull-case scenario and $17 under the worst-case scenario. The firm currently has an “Overweight” rating on the biotechnology company’s stock.

“Overall, we believe these data are strong and support mRNA-1273 as a best-in-class vaccine for COVID-19. We expect further details, including all key secondary endpoints such as the impact on asymptomatic disease, once the study completes. We see Moderna up on today’s update,” said Matthew Harrison, equity analyst at Morgan Stanley.

Several other analysts have also recently commented on the stock. The Goldman Sachs Group set a $105.00 price objective on shares of Moderna and gave the stock a “buy” rating in July. Piper Sandler lifted their price target on shares of Moderna to $136 from $134. Oppenheimer reissued a “buy” rating and issued a $108.00 price target.

Analyst Comments

“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,” Morgan Stanley’s Harrison added.

“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.”

Upside and Downside Risks

Risks to Upside: 1) Supporting clinical data across several modalities. 2) Meeting timelines and continuing to expand a diversified pipeline. 3) Launch vaccines in multiple indications including CMV and COVID-19 – highlighted by Morgan Stanley.

Risks to Downside: 1) Efficacy and/or safety concerns cause investors to write-off subsequent readouts across additional modalities. 2) Delays in Moderna’s ability to generate significant clinical data. 3) Stronger than expected competitor data.