Moderna Inc MRNA reported Monday with strong interim late-stage results for mRNA-1273, its coronavirus vaccine candidate. Despite the positive development, one analyst at BMO Capital Markets issued a downgrade of Moderna on Tuesday.
The Moderna Analyst: George Farmer downgraded Moderna from Outperform to Market Perform and increased the price target from $94 to $109.
The Moderna Thesis: There's likely to be limited upside from current trading levels following announcement of the positive COVE Phase 3 outcome, Farmer said in a Tuesday downgrade note.
"We believe a near-term best-case scenario is mostly reflected in shares including an mRNA-1273 EUA before year-end and full approval mid-2021," the analyst said.
Data from the interim analysis cements expectations that the vaccine candidate will receive emergency use authorization and become available for high-risk individuals, he said.
The Street now expects the final Phase 3 efficacy analysis that's based on 151 events will support final approval, Farmer said.
With most large sovereigns such as the U.S., Canada and Japan already having struck supply deals, the top-line upside for Moderna is limited, the analyst said.
Furthermore, he said estimating revenue growth in 2022 and beyond is challenging given the uncertain future coronavirus vaccine competitive landscape, ultimate net retail and global demand.
Related Link: The Week Ahead In Biotech: The Vaccine Updates, Drug Presentations, And FDA Decisions That Will Move The Markets
Efficacy data reported by Moderna and the Pfizer Inc. PFE-BioNTech SE – ADR BNTX combo are about the same, and therefore safety data assumes importance, Farmer said.
The incidence of Grade 3 events reported in COVE to date — including fatigue, myalgia, arthralgia and headache — leaves much room for improvement, the analyst said.
If the adverse event profile of Moderna's Phase 3 study turns out to be worse than what was observed in the BNT162b2 Phase 3, Moderna shares could face significant correction in spite of the apparent distribution and storage logistical advantages with mRNA-1273, according to BMO.
MRNA Price Action: At last check, Moderna shares were down 5.41% to $92.65.
Related Link: The Daily Biotech Pulse: Setback For Alkermes, Boston Scientific's Recall, ALX-Zymeworks Oncology Collaboration
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