Moderna Is Fairly Valued, Balancing Declining COVID-19 Base Business with Promising Future Pipeline: Analyst

William Blair initiated coverage on Moderna Inc MRNA with a Market Perform rating. 

Bolstered by the COVID pandemic success, Moderna emerged as a leader in mRNA technology, put nonviral lipid nanoparticle delivery back on the map, and is now expanding into additional vaccines and rare-disease therapeutics. 

The analyst has established a fair value estimate of $136.28 per share for Moderna, based on a risk-adjusted net present value for the approved COVID franchise, late-stage pipeline products in development (influenza vaccine, RSV vaccine, CMV vaccine), and select midstage programs (personalized cancer vaccine, Propionic Acidemia, Methylmalonic Acidemia, and Glycogen Storage Disease Type 1a therapeutics)

The analyst says the current valuation is fair for declining COVID-19 base business, the competitive ex-COVID vaccine landscape, and the timing gap to the early-stage therapeutic pipeline.

William Blair models around $6.3 billion in global COVID-19 vaccine revenue in 2023 compared to a consensus of $6.6 billion.

As ongoing clinical trials continue to investigate the tolerability of regularly dosed mRNA—a challenge faced by similar programs—mRNA's therapeutic uses could represent a next-generation approach to enzyme replacement strategies, the analyst writes.

Given the successful progression of Moderna's influenza, CMV, RSV, and personalized cancer vaccine (PCV), the analyst projects a 7% compound annual growth rate (CAGR) over five years for their vaccine franchise. 

However, it's worth noting the challenges faced so far in developing mRNA-based flu vaccines and the competitive nature of the RSV market. 

Moderna's PCV, developed in partnership with Merck & Co Inc MRK, has shown positive results in Phase 2 trials for adjuvant melanoma and is advancing to Phase 3.

However, questions still linger regarding its application in early or late therapy stages, influenced by William Blair's perspectives on the manufacturing process.

Price Action: MRNA shares are down 3.01% at $122.62 on the last check Monday.

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