3 Reasons It’s not too late to buy Moderna stock

Some investors believe that the ship has already sailed when it comes to investing in it Moderna (NASDAQ: MRNA). With a market potential of over $ 50 billion, Moderna ‘s chances for its COVID-19 mRNA-1273 vaccine appear to be largely baked into its share price.

I definitely agreed that Moderna ‘s valuation a couple of months ago was much more attractive than it is now. However, I don’t think it’s too late to buy the biotech stock. Here are three reasons why.

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1. Billions of dollars are likely along the way

I fully expect the U.S. Food and Drug Administration (FDA) advisory committee meeting today to vote overwhelmingly in favor of recommending an emergency use permit (EUA) for mRNA-1273. I also fully expect the FDA to soon introduce the EUA vaccine to the COVID-19 Moderna vaccine.

Assuming this actually happens, Moderna will soon get a huge collection of money. The company has supply contracts with the US, Canada, the UK, the European Commission, Israel, Japan and Singapore. How much money could Moderna make from mRNA-1273 soon? Bernstein analyst Ronny Gal estimates that the biotech will be raking in $ 11 billion next year.

I think the total number could be even higher than that. The US has already used its option to purchase an additional 100 million doses of mRNA-1273. If any of the companies fall ill with coronavirus vaccines, Moderna could sell far more doses to the U.S. and other countries than their current supply agreements specify.

Yes, many investors know strategically that Moderna is on the threshold to attract huge revenue. I suspect, however, that when the company announces its quarterly results over the next year, the full impact of Moderna ‘s financial strength will hit and drive the stock higher.

2. Long-term platform capability

On a related note, Moderna CEO Stephane Bancel has publicly stated that his company will use its new wealth to invest heavily in expanding its pipeline. Bancel even speculated that Moderna could become the largest vaccine company in the world within the next three or four years.

Maybe that’s too much to expect. However, I think Moderna has great long-term potential for its mRNA platform. That platform is likely to grow much larger thanks to the money coming from mRNA-1273.

I expect Moderna to have another megablockbuster on the market within the next few years, with the cytomegalovirus (CMV) vaccine coming up for end-of-phase testing next year. Maybe that’s just the tip of the iceberg. It is my opinion that some investors do not fully appreciate the potential opportunities for Moderna in the future with its mRNA vaccines and treatments.

3. Able to use COVID-19 vaccines more frequently

Finally, there is a wild card that can shake up the dynamics of Moderna. We do not know at this stage the extent to which mRNA-1273 or any other vaccine provides protection against infection with the novel coronavirus. Ronny Gal of Bernstein accepts that elevated views will be required every three years. Others expect annual vaccinations. But what if the COVID-19 vaccine is needed more often – perhaps every six months?

This could significantly increase the annual market for coronavirus vaccines. If Moderna could realistically expect to sell 1 billion doses annually at $ 32 per dose, the stock is a real steal at its current valuation.

It is too early to know the exact time of protection for mRNA-1273 and other COVID-19 vaccines. However, it is my opinion that investors are making a mistake if they assume that it is too late to buy Moderna stock while the jury is out on this important issue.