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Can Moderna shares rally on higher vaccine efficacy against Delta variant?

Covid-19 vaccine maker Moderna’s stock has been on a tear this year, hitting record highs.

Moderna shares stock price MRNA vaccine Source: Bloomberg
  • Moderna (Nasdaq: MRNA) share price falls to US$456.76 per share
  • The US biotech said it will not exceed its 2021 vaccine production target
  • Moderna’s jab may be more effective against the Delta variant than its rival’s shot, a study suggested
  • Feeling bullish or bearish about Moderna? Open an account with us to start trading the stock.

Moderna snaps record-setting stock rally

Shares of Covid-19 vaccine manufacturer Moderna halted its gains, despite upcoming new guidance on the need for booster shots.

The US firm declined 5.7% to US$456.76 on Tuesday amid a broader rout in biotech stocks, after it had jumped to its all-time record of US$484.47 on Monday.

Year-to-date, Moderna has soared 308.8% to fresh highs. The price gains came as more governments and employers have imposed vaccine requirements.

Last Thursday, Moderna said its jab stayed about 93% effective through six months after the second dose, barely changed from the 93% efficacy in the original trial.

Nonetheless, the drugmaker expects booster shots to be necessary before the winter season, as antibody levels would likely fall.

Within 17 analysts, six rated MRNA ‘buy’, seven gave ‘hold’ calls, while four recommended ‘sell’ as of Tuesday. Their average 12-month target price was US$277.07, Bloomberg data showed.

Goldman Sachs last Friday upped its target to US$461 while Barclays eyed a Wall Street high of US$463, but Moderna’s shares shot past those levels on Monday.

Jefferies, which recommended ‘hold’ and targeted US$425, foresees booster shots becoming available by 2022.

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Where next after better-than-expected turnover?

Revenue for 2Q 2021 reached US$4.4 billion, exceeding expectations of US$4.2 billion based on a Refinitiv poll of 10 analysts.

In its second-quarter results call last week, Moderna said it will not produce more than the 800 million to 1 billion vaccine doses that it targeted for 2021, as it is 'capacity constrained'.

Moderna has inked advance purchase agreements for anticipated product sales of US$20 billion for 2021. For delivery next year, it has already signed agreements for some US$12 billion of product sales with options for another US$8 billion.

Investors are now focusing on the sustainability of Moderna’s vaccine income, in terms of the need for additional doses and over what time period, Bloomberg Intelligence analysts wrote last Friday.

‘Opening the lid on the current order status for 2022 helps to justify some of the company’s optimism, though uncertainties remain,’ they added.

Is Moderna superior to Pfizer against the Delta variant?

Two reports posted on Sunday, before peer review, indicated that the mRNA vaccine from Moderna may be more effective against the Delta variant of the coronavirus than the shot from Pfizer and BioNTech.

One study involved more than 50,000 patients and looked into the effectiveness of the vaccines against infection in July, when the Delta variant was predominant, Reuters reported.

Although the effectiveness of Moderna’s jab declined to 76% in July, from 86% in early 2021, the Pfizer/BioNTech vaccine’s effectiveness slid to 42% from 76%, the researchers found.

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