Oppenheimer analyst Hartai Singh suggests that Moderna’s COVID-19 vaccine moves at “warp speed” as the company and its James T Kirk—Stéphane Bancel—has full throttled a process that takes years down to months thus far. If everything comes together at the right place and at the right time, MRNA will not only produce something that can literally help save the world from tremendous health and economic pain but also produce universal returns for the 23.94% insiders holding equity plus venture capital firms, such as Noubar Afeyan’s Flagship Pioneering, which holds 50 million shares or about 13.7% of the total, reports Yahoo Finance. Of course, if just one assumption goes awry, timelines are adjusted a batch of competitors are moving at unprecedented velocity.
As Yahoo Finance recently covered, Mr. Singh is progressively more impressed with how Cambridge, Massachusetts-based ‘the software of life’ is progressing full throttle moving like the starship Enterprise so its members can boldly go where no person has gone before. After all, as they are close to wrapping up their Phase I study for mRNA-1273, their Phase II study has already received FDA approval and starts soon. Moreover, as TrialSite News discussed just the other day, they are already planning for Phase III.
The Analyst Speculates
Part of Oppenheimer’s Healthcare group, Analyst Singh secured his Case Western Reserve undergrad degree in Biology and went on to achieve an MBA from Duke University’s Fuqua School of Business. He has also done a lot of graduate work in Computational Neurobiology. He started his career on the “sell-side” at Lehman Brothers. His thoughts, recently covered again in Yahoo Finance, suggest a combination of factors and forces that increase the possibility of success” for Moderna including 1) CMV vaccine, 2) scalable platform, and 3) outcomes thus far evidencing all eight of Moderna’s vaccines demonstrate safety and efficacy). Mr. Singh didn’t include on that list other factors that surely can contribute such as financing. As we have discussed at TrialSite News, the U.S. government is backing Moderna to the tune of $483 million. And the prediction: Mr. Singh suggests that if everything comes together in the right way and in the right time the vaccine could be commercial ready by the first half of 2021—meaning potentially just several months away.
Mr. Singh reminds of the recent Lonza deal, a worldwide leader in contract manufacturing for biotech companies, which importantly according to the partners could scale out to literally billions of vaccine doses per year. Part of the Swiss Lonza Group, Lonza represents big biotech and pharma manufacturing pedigree: since the 19th century offering product development services to drug makers.
Intellectual property rights are important and some shred moves can be considered in desperate times. Remember TrialSite News’ coverage of the Wuhan Vaccine Institute’s suggested move to patent Gilead’s remdesivir? As mRNA-1273 progresses down the pipeline it becomes progressively move valuable to the world. What are the economics of the first successful COVID-19 vaccine? They can fund countless more Starship Moderna voyages.
Hence now the planning to sign up international studies for mRNA-1273. Singh suggests this could be a proactive move to preserve worldwide rights for the product).
Bullish on MRNA
Analyst Singh, 5-star analyst, is bullish about this stock, noting, “We point out to investors that MRNA’s decade-long investments in IP, manufacturing and information technology have combined with its world-beating preclinical and clinical mRNA platform to be potentially ‘perfectly positioned’ to respond to the COVID-19 pandemic and the need for a vaccine, with a speed and scale that is frankly astonishing by any historical measure. While there is much to be done, we stay bullish.”
The stock has grown 200% year to date. At present there are 9 buys and 2 holds and the stock enjoys “Strong Buy consensus rating.” An average price target of $53.67 Yahoo Finance reports, “implies an impossible downside of 9%.” As of writing they trade at $64.56 for a market capitalization on $24.2 billion. Of course, as this is a speculative biotech asset, this valuation has nothing to do with existing revenues and growth—which are minimal—and everything to do with the future of its products. Hence the potential issue—there are any number of things that cannot go according to plan and throw off current projections. That will equate to selling and downward adjustments.
Competition at Unprecedented Speed
As it turns out, there are a number of Starship Enterprises in the race of 2020 to find a vaccine for COVID-19. From China’s CanSino Biologic’s adenovirus type 5 now in Phase II (ahead of Moderna) to Inovio Pharmaceuticals’ DNA plasmid vaccine Electroporation device (Phase II possibly by summer) to the University of Oxford’s ChAdOx1 (AstraZeneca just signed up for manufacturing and commercialization) to the German venture CureVac (U.S. led by Donald Trump tried to buy the mRNA-based vaccine) and Germany’s BioNTech and its recent pairing with American Pfizer). Finally, at least two different groups in China are moving at near warp speed themselves, including candidates from the partnership of the Beijing Institute of Biological Products/Wuhan Institute of Biological Product and Sinovac.