The two most notable names for Covid vaccinations are Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA), with the later making the greatest gains of the two. Up 66% since the start of July, and hitting a high of $497 per share, what is in store for the covid market and Moderna in particular.
Pfizer and Moderna have together made over $60B in sales of their vaccine shots, but share prices fell on Wednesday as concerns on the valuation, Delta variant and side effects of the shot instilled some fear into investors.
Moderna has grown to a valuation of $168.8B before earnings were recently announced. But since that report, analysts have cut their ratings of the stock, mentionable names are Oppenheimer analyst Hartaj Singh and Piper Sandler analyst Edward Tenthoff who have been long time bulls.
Viruses evolve. That’s nothing new. The Delta variant is the latest concern related to Covid-19. This variant is viewed by doctors as more contagious than previous variants, and to what extent the effectiveness of the vaccinations are to the Delta variant isn’t fully understood yet. Moderna’s vaccine shot is seen as more effective in comparison to Pfizers, but there are still concerns regarding continued mutations.
EU regulators are looking into new possible side-effects of the Moderna shot. These include skin rashes and two kidney disorders that have been reported. Although this is a small number of people on the grand scale, new information related to side effects will create concern among the medical field and investors.
Recent announcements that the FDA are working to allow boosters for vulnerable people. Analyst forecast revenue of $7.6B for Moderna in 2023, a majority of this coming from booster sales. Vaccine developers say that evidence of decreasing antibody levels and Delta variant risks support the need for these boosters.
As this market grows, it can be sure that more names will step into the space and create competition for Pfizer and Moderna. This will drive the prices of shots down as companies strive to maintain demand.
Recent news has taken 20% off Moderna’s share price. But the growth seen year-to-date is commendable. But what has happened grants no guarantee of future growth. Concerns over new side effects have taken their toll, but if action is brought against Moderna, even if it is just to halt vaccination shots whilst investigated further, the stock would see much more downside.
Looking at the long term potential, Moderna will definitely face some competition as more drug companies develop their products and get added to the market. Moderna and Pfizer would lose their control in the sector, and ultimately lose much of their revenue.
It is a stock I will be keeping my eye on, but I do not expect to see any returns like the ones we have seen already.