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Moderna (NASDAQ: MRNA) saw its stock jump on Thursday despite mounting losses, after the COVID-19 vaccine-maker reported more than double the revenue Wall Street predicted. Moderna missed EPS expectations with revenue far surpassing analyst forecasts as the company first began to recognize revenue from sales of its COVID-19 vaccine in December 2020. The loss was simply a result of heavy investment to increase the production of its COVID-19 vaccine.
The company has spent the past two months producing and shipping its much-awaited coronavirus vaccine but its fourth-quarter is merely the surface of its vaccine success. In 2021, Moderna plans to manufacture 600-700 million doses of its COVID-19 vaccine but it should be able to expand its capacity to 1.4 billion doses in 2022 due to heavy capital investments, all of which should result in massive profits.
Q4 and FY 2020
For the fourth quarter ended December 31, Moderna reported a quarterly loss of $0.69 per share, which was below Zacks Consensus Estimate of $0.25. Moderna did bring in $570.75 billion in sales. That crushed the average estimate of analysts surveyed by FactSet for $279.4 million and surpassing the Zacks Consensus Estimate by 74.76%. Just one year ago, revenues amounted to $14.06 million but until its mRNA-1273 coronavirus vaccine, the company had never brought an approved medicine to the market.
Losses grew to 69 cents per share after a 37-cent per-share loss in the year-ago period, whereas analysts expected a 34-cent loss. Although a big portion of revenue still came from the grant received from the Biomedical Advanced Research and Development Authority to advance its COVID vaccine, for the first time, Moderna had product sales, and they amounted to $199.87 million as the company began recognizing COVID vaccine sales in December. Although losses widened in 2020, Moderna's sales skyrocket to $803.4 million.
One of the biggest risks ahead for all vaccine makers is the prevalence of new coronavirus variants. To tackle this, Moderna is investigating two upgrades. The first is actually a third dose of vaccine that would increase neutralizing antibody levels to better fend off new strains. The second is a strain-specific upgraded version which has been moved into preclinical and phase 1 trials as of the end of January. Moderna is designing it to target the. If successful, the company should be able to quickly adapt it to protect against future strains, although it is designed to target the South African variation.
In early December, Moderna began a phase 2/3 trial of its COVID vaccine in young adults who are 12 to 17years old. The data will be reported in spring and should result in Emergency Use Authorization just in time for the back-to-school period in September. But as of last month, Moderna didn't have enough adolescent volunteers.
Teens aren't at the greatest risk from serious COVID-19 complications but they play a role in the transmission of the virus, so their vaccination is another important element in containing the pandemic.
The company expects $18.4 billion in full-year 2021 sales of its COVID vaccine. The figure is based on already inked advance purchase agreements but additional discussions are ongoing for both 2021 and 2022. That outlook shattered forecasts as analysts expected $11 billion. Furthermore, the company said it plans to make 700 million doses of its vaccine this year, while still working to bring that capacity up to 1 billion. In 2022, Moderna expects to be able to produce 1.4 billion doses.
Chief Executive Stephane Bancel called 2020 a historic year for the company as it trailed Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) by a week in the U.S by gaining emergency use authorization. The vaccine is Moderna's first commercial product with 32 million doses having been administered in the U.S. to millions of people around the world.
In 2020, Moderna went from knowing mRNA vaccines can be highly efficient it went to cash-flow generating commercial company that is helping save the world from the claws of an invisible enemy. The latest reported quarter ended a milestone year for the biotech company. 2020 was a year in which the world went dark but the pandemic helped Moderna shine as it provided us with a glimpse of light at the end of the tunnel. Since the beginning of 2021, its shares gained 38.6%, greatly exceeding S&P 500's gain of 4.5%.
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