Moderna’s headquarters in Cambridge, Mass.
Matthew Healy/AFP via Getty Images
There couldn’t have been better news on which to sell. So for Moderna investors so inclined, Monday’s great readout from its Covid-19 vaccine trial seems to have led to a Tuesday selloff. The 94.5% effectiveness shown in the trial’s first interim glimpse has also led Wall Street to a mix of price target increases and rating downgrades.
The stock (ticker: MRNA) was down 6% in Tuesday morning trading, to $92.20, after a spurt as high as $103 Monday, when the Cambridge, Mass., biotech company reported the first look at its vaccine’s pivotal trial. Moderna’s results looked even better than the “more than 90%” effectiveness reported a week earlier for a vaccine from Pfizer (PFE) and BioNTech (BNTX). after their first jubilant leaps, Pfizer and BioNTech shares also sold off.
Wall Street’s average price target for Moderna stock is now $107, according to FactSet, compared with $92 a month ago.
One of Moderna’s most ardent fans has been Oppenheimer’s Hartaj Singh. Now that Moderna’s messenger-RNA technology has proven its clinical value, Hartaj has lifted his target price on the stock to $157 from $108. That would value Moderna—which has yet to ship its first product—at a cool $68 billion.
George Farmer at BMO Capital Markets also raised his Moderna price target on Tuesday, to $109 from $94. But he downgraded his rating to Market Perform from Outperform.
“The success of near-term catalysts are largely reflected in the company’s share price,” Farmer said in a note. Still, he believes that the new proof of Moderna’s technology “establishes the company as a new vaccine development powerhouse.”
Farmer’s near-term expectations for Moderna hinge on the average price it will obtain for its Covid vaccine. His $109 target price assumes a price of $16 a dose. At $20 a dose, he thinks the stock could reach $143. But a lower $12 a dose would reduce the stock’s value to $78. Vaccine pricing will reflect competition from Pfizer and other developers like Johnson & Johnson (JNJ), AstraZeneca (AZN), Novavax (NVAX), and Sanofi (SNY).
One of the more dour followers of Moderna has been Mani Foroohar of SVB Leerink. In September, he took his Moderna price target down to $41 and his rating to an Underperform. Acknowledging the “remarkable early efficacy” shown for the company’s vaccine, Foroohar nudged his target price up to $59 in a Tuesday note, while maintaining his Sell recommendation.
Most interesting are Foroohar’s views on other vaccines, in light of the strong showings by Pfizer and Moderna. He thinks it bodes well for the effectiveness of any vaccine that targets the virus’s spike protein, which most do. The Covid-preventing prowess of the Pfizer and Moderna shots seems to track the high-level of anti-coronavirus antibodies they produced in recipients. That is encouraging for vaccines with a strong antibody showing in early trials, like Novavax.
But the SVB Leerink analyst also sees the distribution of the first vaccines as closing a window for testing the 45 other candidates in clinical development. Foroohar fears it will become difficult to recruit volunteers for placebo-controlled trials after mid-2021, when shots from Pfizer and Moderna become more widely available.
If a vaccine developer isn’t in Phase 3 trials now, he surmises, it may soon be too late.
After the pandemic is tamed, Foroohar sees vaccine developers making Covid shots part of a combined seasonal vaccination, along with an influenza shot.
Write to Bill Alpert at [email protected]
