Shares of Moderna surged more than 15% on Tuesday following an upgrade by Oppenheimer, who now rates the stock as “outperform.” The investment firm believes that Moderna, known for its Covid vaccine, has the potential to market five different products by 2026. This upgrade comes after a challenging year for the company in 2023, where its stock plummeted almost 45% due to a global decline in demand for Covid-related products.
While Oppenheimer acknowledges that Moderna’s Covid sales may reach a low point in 2024 due to factors like vaccine fatigue, the firm expects a rebound in sales in 2025 and beyond. As education about Covid increases and there is more spending on disease awareness, the demand for Moderna’s vaccine is predicted to rise again. This positive outlook is further supported by Moderna’s pipeline potential and the potential launch of several new products in the next 12 to 18 months, ultimately boosting sales in 2025.
One key highlight in Moderna’s pipeline is an experimental vaccine targeting respiratory syncytial virus (RSV) in older adults. RSV typically causes mild cold-like symptoms but can have more severe consequences for seniors and children. Moderna expects a decision from the Food and Drug Administration (FDA) on this vaccine in April. Additionally, Moderna’s experimental flu vaccine, which demonstrated a stronger immune response in clinical trials compared to existing shots, could receive FDA approval in 2024 or 2025.
Another promising candidate in Moderna’s pipeline is its experimental personalized cancer vaccine, which the company anticipates filing for FDA approval in 2024 or 2025. Moderna may take advantage of the FDA’s accelerated approval pathway, designed to expedite drug approval for treating serious medical conditions with unmet needs. The company, in collaboration with Merck, is currently investigating the potential use of the vaccine in combination with Merck’s Keytruda therapy for patients with melanoma and other cancers.
Moderna reaffirmed its sales growth expectations for 2025 in a shareholder letter, emphasizing the potential approval of its RSV vaccine and a combination shot targeting Covid and the flu. The company anticipates revenue to decline to $4 billion in 2024 before rebounding the following year. Moderna aims to “break even” by 2026. While the company initially outlined its goal of launching up to 15 products within the next five years during its research and development day in September, it is important to note that it now expects to hit the lower end of its sales forecast of $6 billion to $8 billion for 2023, reflecting weaker demand for Covid vaccines.
Despite the challenges faced by Moderna in 2023, the recent upgrade from Oppenheimer reflects a renewed sense of optimism for the company. The expectation of launching multiple new products, including vaccines for RSV and the flu, as well as the potential approval of a personalized cancer vaccine, positions Moderna for significant growth in the coming years. With an eye towards the future, Moderna aims to diversify its revenue streams and reduce reliance on its Covid vaccine. Investors and industry analysts will undoubtedly continue to closely follow Moderna’s progress as it navigates the evolving landscape of the pharmaceutical industry.