Moderna (MRNA) is undoubtedly one of 2020’s success stories. Its rise has rested on the hope it can be the one to solve the COVID-19 conundrum and bring to market the desperately needed COVID-19 vaccine.
Although several questions regarding its business practices - unrelated to its vaccine candidate’s progress - have come to the fore recently (including how execs are possibly profiteering off the stock’s rise and an unsuccessful attempt to invalidate another company’s patent), what concerns J.P. Morgan analyst Cory Kasimov at this point, is its fast accumulation of share gains.
“Bigger picture,” said the 5-star analyst, “We remain constructive on the company overall (COVID-19 or otherwise) but are currently most comfortable on the sidelines given MRNA’s $30B+ valuation.”
That valuation has increased dramatically since the turn of the year (up by 306%) as investors have applauded each step in the progress of the biotech’s COVID-19 vaccine candidate mRNA-1273. Moderna’s latest surge came earlier this week, after data published in the New England Journal of Medicine showed that in a preclinical study evaluating mRNA-1273 in nonhuman primates, the vaccine elicited strong antibody and T cell responses.
With a Phase 3 study of mRNA-1273 initiated earlier this week, and management hopeful it can present data by Thanksgiving, the positive preclinical study results are a nice addition to the candidate’s progress. However, Kasimov wonders how much influence the data will have in the long run.
Kasimov said, “We see the publication of Moderna’s data in non-human primates (NHP) as supportive of the potential for mRNA-1273 (COVID-19 vaccine), adding to the other encouraging pieces of early evidence, including Phase 1 results. That said, how results in monkeys ultimately translate to humans and whether the lack of an apparent CD8 T-cell response is relevant (especially when other vaccine candidates have shown CD8 T-cell involvement) are two (of admittedly many) outstanding questions.”
Accordingly, Kasimov maintained a Neutral (i.e. Hold) rating along with an $89 price target, which implies nearly 15% upside from current levels. (To watch Kasimov’s track record, click here)
Overall, there’s still plenty of support for Moderna among Kasimov’s colleagues. MRNA's Strong Buy consensus rating is based on 13 Buys and 3 Holds. Over the next 12 months, the Street is factoring in a 17% gain for the stock, considering the average price target clocks in at $90.67. (See Moderna stock analysis on TipRanks)
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