Battered by a steep broad-market selloff this week, Moderna shares fell for a sixth straight day Friday as experts questioned whether Covid-19 vaccine sales alone will help justify the firm’s meteoric valuation, intensifying a crash that’s wiped out more than 60% of the value in one of last year’s top stocks and turned it into this year’s worst performer.
Moderna stock fell 4.4% Friday to an eight-month low of $160, pushing shares down more than 20% over the past week amid growing research suggesting Moderna’s Covid-19 booster, while very effective against previous strains, has been less effective against the rapidly spreading omicron variant.
Though the number of Covid infections has spiked amid the omicron-spurred wave of the pandemic, the Centers for Disease Control and Prevention said Friday that Moderna and Pfizer boosters were 90% effective at preventing people infected with the new variant from being hospitalized.
Speaking to Yahoo Finance on Thursday, Jefferies analyst Michael Yee said the “overly high expectations” set last year, as Moderna’s Covid-19 vaccine became widely available to the public, will “lead to challenges . . . as people digest” what’s next for the firm beyond Covid vaccines.
Yee said the recent stock drawback has helped put Moderna’s valuation in line with other biotechnology competitors, but he warned analysts increasingly expect Covid vaccine sales—currently Moderna’s sole revenue source from a commercialized product—will fall over the next few years as the pandemic becomes endemic and competition heats up among treatment and prevention options.
Moderna’s stock plunge has pulled prices down so much that Bank of America analyst Geoff Meacham told investors in a Friday note that its valuation is now “back to earth” after its meteoric rise during the pandemic.
Meacham said he’s now focused on the company’s pipeline beyond Covid (Moderna is also developing a flu vaccine), pointing to the firm’s massive $17 billion in cash as a source of “strategic” opportunity.
In a Friday note, UBS analyst Eliana Merle was more optimistic about Moderna’s prospects, calling its mRNA technology a disruptive force in the $35 billion annual vaccine market and saying its success with Covid-19 suggests a high likelihood of success for other vaccine targets.
Shares of Moderna have plunged 67% from an all-time closing high of $484 on August 9, wiping out about $133 billion from the firm’s market capitalization, which now stands at roughly $65 billion.
Though it skyrocketed 143% to land the S&P 500’s third-best gain in 2021, Moderna stock has plummeted 35% this year—even worse than Netflix, which is down 32% after a steep 20% plunge Friday following a disappointing earnings report. To compare, Devon Energy and Marathon Oil, last year’s top- and second-best-performing stocks in the S&P, have climbed 7% and 11% this year, respectively.
$5.3 billion. That’s how much Moderna CEO Stéphane Bancel, who joined the firm in 2011, is worth Friday, according to Forbes. The French native owns a roughly 8% stake in Moderna and was at one point worth more than $12 billion.
Founded in 2010, Cambridge, Massachusetts-based Moderna spent nearly a decade developing the technology for its messenger RNA vaccines, which tell the body to produce part of a pathogen to trigger an immune response—unlike traditional vaccines that instead use a piece of the pathogen.
Once the pandemic hit, the company doubled down on the efforts and filed for an emergency use authorization for its Covid-19 vaccine in November 2020. The shots have proven to be a massive boon for businesses heading up their development, but Moderna shares have struggled in recent months as critics increasingly question whether or not sales of Covid-19 vaccines alone will prove a viable revenue stream in years to come.
In November, the company reported third-quarter sales and earnings that failed to meet analysts’ expectations, with revenue falling short of $5 billion, despite average analyst projections calling for $6.2 billion. In addition to lower sales projections, supply chain constraints and the development of antiviral Covid-19 treatments have also dented investor sentiment—and triggered Moderna stock selloffs.
Shares of Moderna plunged 17% shortly after the market opened Thursday, wiping out more than $24 billion in market value and pushing prices to a three-month low of $287.
Triggering the morning crash, Moderna on Thursday reported third-quarter sales and earnings that failed to meet analysts’ expectations, with revenue falling short of $5 billion despite average analyst projections calling for $6.2 billion.
In a conference call, Moderna CEO Stéphane Bancel blamed a “more complex” supply-chain environment for the disappointing performance, adding that longer delivery times for international shipments may shift some deliveries to early 2022, instead of 2021’s fourth quarter.
Moderna said it now expects to deliver between 700 million and 800 million Covid-19 vaccine doses this year, down from previous projections calling for between 800 million and 1 billion doses; sales should now fall between $15 billion and $18 billion, instead of the $20 billion originally projected, the company said.
Covid-19 vaccines, which are Moderna’s only commercialized product, have proven to be highly effective in preventing serious illness and the market’s best defense against the virus—making them a massive boon to a slew of businesses heading up their development.However, Moderna shares have struggled in recent months as critics increasingly question whether or not sales of Covid-19 vaccines will prove a viable revenue stream in years to come.
In August, Bank of America sparked one of the biggest selloffs in Moderna’s history after saying future sales expectations don’t justify the company’s current valuation. The analysts warned that lower-than-expected vaccine sales and more intense competition as Covid-19 research advances marked the biggest risks to Moderna stock prices.
Despite its recent weakness, Moderna is still the S&P’s best-performing component this year, with shares skyrocketing about 200% thanks to the company’s Covid-19 vaccine becoming widely available across the world. Still, shares have crashed nearly 40% from an all-time closing high of $484 on August 9.
$9.5 billion. That’s how much Bancel, who joined Moderna in 2011, is worth as of 10:00 a.m. EDT Thursday, according to Forbes. The French native, who owns a roughly 8% stake in Moderna, has seen his fortune plunge by about $1.6 billion as a result of the stock’s rout on Thursday.
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