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Moderna Inc.’s
MRNA,
stock has tumbled 63% from last summer’s record high, but the recent resurgence of COVID-19 cases in Europe and Asia is already rallying shares.
As the number of infections started to inch up in many regions around the world, so has Moderna’s share price, which jumped 30% over the course of last week to close at $178.93 on March 18. That’s up from $138.20 on March 11.
The stock movement comes as pandemic sentiment in the U.S. has appeared to shift. There is fresh concern about the more transmissible BA.2 subvariant, which now makes up an estimated 23% of U.S. cases, and regulators in the U.S. are already discussing another round of COVID-19 boosters.
“Vaccine makers will continue to trade on global fear of more waves,” Jefferies analyst Michael Yee told investors last Tuesday. “A rise of infections—especially any future variant of concern—will likely cause MRNA to rally on renewed expectation of higher demand and 2022-23 orders and natural hedge to the equity market.”
For Wall Street, this isn’t a surprise.
Moderna’s stock soared last summer during the nation’s delta surge. The company’s share price on June 1 was $184.66 on June 1, a time in which cases in the U.S. were at record lows after many Americans rushed to get vaccinated. By Aug. 9, the stock hit an all-time high of $484.47, well into the upswing of the delta wave in the U.S. and amid a public debate about authorizing booster doses.
The stock slowly declined over the rest of the year before dropping to a six-month low of $126.46 on March 7.
The stock has since “recovered in anticipation of the next variant wave and the next round of boosters,” Cowen analyst Tyler Van Buren told MarketWatch.
China, South Korea, and a dozen or so European countries are now reporting notable increases in COVID-19 infections. Though the number of new cases in the U.S. is still dropping, public health officials now say they expect to see an increase in cases as a result of BA.2.
The U.S. has yet to officially order more COVID-19 vaccine doses from any drug maker for a fall or winter booster campaign. However, Moderna CEO Stéphane Bancel this month told investors at Cowen’s health care conference that discussions with the U.S. government for another $100 million order of Spikevax doses are underway.
“What is clear is we will have a vaccine for the U.S. market in the fall, whether it’s sold to the government or sold to the private market or [a] mix,” Bancel said, according to a FactSet transcript of the presentation.
Spikevax generated $17.7 billion in revenue for the company in 2021, an incredible feat for a biotech that has no other approved or authorized therapies. Executives told investors in February that they expect at least $19 billion in sales of Spikevax in 2022. That figure doesn’t take into account another order for the U.S.
What is different this time, however, is how the doses would be distributed; now that Spikevax is a fully approved vaccine, Moderna can sell it directly to hospitals or pharmacies. It can also begin charging a different price, perhaps twice as much per dose in the U.S., because the first contract Moderna signed with the U.S. government ends with the final shipment of shots in April, according to Van Buren.
“This may be the start of a transition to an endemic market,” he said.
In the lull that came after the destabilizing omicron wave this winter, states and local governments began to lift pandemic restrictions at an unprecedented pace. California, for example, is now taking an endemic approach to the virus. Masks came off in many places, and a sense of normalcy came back.
But last week brought a fresh wave of concern about the virus. Bloomberg reported March 14 that a wastewater surveillance system established by the Centers for Disease Control and Prevention showed a higher prevalence of virus in the water than in February. The CDC confirmed the signal, saying that: “While wastewater levels are generally very low across the board, we are seeing an uptick of sites reporting an increase.”
Two days later, the World Health Organization said the number of global cases rose for the first time in weeks, driven by surges in parts of Asia. WHO director-general Tedros Adhanom Ghebreyesus called the trend “just the tip of the iceberg.” By Thursday, Moderna had announced plans to seek approval in the U.S. for a fourth dose of its COVID-19 shot in all adults. (BioNTech SE
BNTX,
and Pfizer Inc.
PFE,
have also requested authorization this month for a fourth dose in older adults.)
Moderna’s stock has declined 29.9% so far this year, while the broader S&P 500
SPX,
is down 7.4%.
