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Moderna Just Gave Investors Another Reason to Buy the Stock

Moderna (MRNA -3.58%) is best known for its work in the coronavirus vaccine market. That’s why the company’s stock skyrocketed in the earlier days of the pandemic. It’s also why its shares have lagged over the past three years — its COVID-19 vaccine sales dropped off a cliff.

However, the biotech has been looking to move beyond this therapeutic area. It recently earned approval for a vaccine for the respiratory syncytial virus (RSV). Even more recently, it announced positive clinical news that should have investors excited. Let’s look closer at Moderna’s latest news and why it matters.

Moderna’s combo vaccine nails a phase 3 study

Moderna has been trying to develop several combination vaccines that can inoculate patients against multiple viruses. It’s not hard to see the advantages of this approach. First, there is convenience. Getting one shot beats getting two, provided there is no significant drop in efficacy. Second, it has the potential to confer meaningful cost savings. Third, it can increase vaccination rates. Some patients might not be particularly interested in being inoculated against one of the viruses a combination vaccine targets, but by getting said vaccine, they are protected all the same.

Moderna recently released results from a phase 3 study for its combo coronavirus/flu vaccine. This candidate, called mRNA-1083, is constructed with elements of Moderna’s next-gen COVID-19 vaccine and its investigational flu vaccine. mRNA-1083 knocked it out of the park in the study. It hit its primary endpoints of eliciting a higher immune response than commercialized vaccines for COVID-19 and the flu in adults 50 and older. mRNA-1083 was pitted against Moderna’s own Spikevax, as well as Fluzone, one of the leading flu vaccines, which is marketed by Sanofi.

Targeting older patients is an especially wise strategy, since the bulk of people who are hospitalized and/or die from COVID-19 or the flu are in that demographic. So, things are looking very promising for this program.

A bet on Moderna’s platform

On the one hand, it’s not too surprising that investors have sold off Moderna’s shares over the past few years. In my view, even with the success it experienced in the COVID-19 vaccine market, the stock had gotten a bit ahead of itself — a correction was arguably overdue. Once financial results dropped off a cliff, it was inevitable.

MRNA Revenue (Quarterly) data by YCharts

That said, Moderna now looks like an attractive biotech stock. Thanks to its deep pipeline, it is moving beyond its coronavirus portfolio. The recent approval of its RSV vaccine, mRESVIA, means it will finally generate revenue from another source. Some analysts believe mRESVIA could generate close to $1 billion in sales as early as next year. Moderna could also earn approval for mRNA-1083 within the next year or so. That will depend on regulatory developments, but it’s fair to be cautiously optimistic.

The biotech has other key late-stage pipeline candidates. Moderna is developing a vaccine for the cytomegalovirus — there currently aren’t any approved in this area. It’s also partnering with pharmaceutical giant Merck to develop mRNA-4157, a potential personalized cancer vaccine. There is a broader point to note here. Moderna’s rich and diversified mRNA-based platform has consistently produced important wins in the past few years, starting with its coronavirus vaccine.

This technology was unproven until 2020 (no mRNA-based vaccine had been approved or granted authorization by the U.S. Food and Drug Administration until the pandemic), and now it looks incredibly promising. That’s excellent news for Moderna and its shareholders, especially since the company has many, many more programs in early stage studies.

Though the recent positive phase 3 data for mRNA-1083 is great news, investors should seriously consider buying the stock because of Moderna’s innovative platform.

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