Morgan Stanley: Moderna Has Significant Competitive Advantage

Moderna Inc MRNA, a messenger RNA therapeutics company, recently offered 26.28 million shares priced at $23 each in an IPO.

The Analyst

Morgan Stanley analyst Matthew Harrison initiated coverage of Moderna with an Overweight rating and $29 price target.

The Thesis

Moderna has significant competitive advantages given its multibillion-dollar opportunity, a broad pipeline, an industrialized approach and key platform derisking in terms of immunogenicity, delivery and initial proof-of-concept, Harrison said in a Wednesday note.

MRNA addresses almost two-thirds of all proteins in the body, and Moderna has built a broad industrialized platform to address mRNA therapeutics, the analyst said. 

Moderna's pipeline is broad, with 21 programs. If the entire pipeline is successful, the company could achieve peak sales as high as $35 billion, Harrison said, 

Harrison estimates peak, risk-adjusted sales of $8 billion from prophylactic vaccines, rare diseases and cancer vaccines.

Moderna has managed to resolve the two key challenges in developing mRNA therapeutics: the  body's rejection of mRNA and the inability to send the mRNA to target tissues, the analyst said.

The platform risk is therefore significantly diminished, he said. 

Morgan Stanley sees the following as key catalysts for specific programs:

• Initial data for chikungunya antibody expected in 2020.
• Initial PIV3 and CMV immunogenicity data likely in 2019.
• Initial data for key rare disease programs due in 2020.
• Randomized data for personal cancer vaccines due in 2020.

Even if an individual program fails due to biological reasons, the overall platform is unlikely to be impacted, Harrison said. 

The Price Action

Moderna shares were up 0.39 percent at $15.33 at the time of publication Wednesday. 

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