With the increasing COVID-19 infections in China, and the looming potential for stricter lockdown measures, investors are looking at Moderna’s future prospects. Some are predicting a potential reacceleration in demand for the biotech company’s Spikevax vaccine due to the rising cases globally, but the question remains: is it an opportune time to buy Moderna’s stock?
China has seen a surge in COVID-19 cases, primarily due to the Omicron XBB variants. According to Dr. Zhong Nanshin, director of the Guangzhou Institute of Respiratory Diseases, infections in China could top 40 million this week and might reach 65 million per week by the end of June.
While these developments bring Moderna into focus, it’s important to note that Moderna’s vaccine isn’t yet approved in China. However, investors predict that China’s surge might indicate rising case numbers in other parts of the world, potentially increasing demand for vaccinations and booster shots globally.
According to the CDC, 79% of adults in the U.S. are vaccinated, but less than 21% have received the updated booster dose targeting Omicron subvariants. Moderna, which forecasts a modest $5 billion revenue from its COVID vaccine this year, plans to sell doses at about $130 apiece in the private sector, substantially more than the previous $30 it charged the U.S. government.
However, the increasing case numbers don’t necessarily mean a guaranteed investment in Moderna. As stocks like Moderna have demonstrated, market volatility is high, depending on the outlook for COVID-19. Despite rising cases, relying solely on the COVID-19 vaccine for profitability isn’t a sound strategy for Moderna, as the revenue from vaccines or boosters could be fleeting.
Moderna is also developing vaccines for Zika, Respiratory Syncytial Virus (RSV), and cytomegalovirus, but it could take years for these vaccines to generate significant revenue. The company projects its revenue to reach $15 billion by 2027, a target that many consider optimistic under current circumstances.
With a market capitalization close to $50 billion, Moderna’s worth is being questioned, especially compared to stable, diversified healthcare businesses such as McKesson, AmerisourceBergen, or Cardinal Health. Given the uncertainties, despite the potential rise in COVID-19 cases, Moderna’s stock doesn’t appear to be a worthwhile investment at present.
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