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Moderna (NASDAQ: MRNA) Makes Gains on Phase 3 Testing

Posted on Monday, July 27th, 2020 by Steve Anderson

Moderna (NASDAQ: MRNA) Makes Gains on Phase 3 Testing

The race to develop a vaccine for COVID-19 is one of the greatest scientific ventures of the new millennium. Though it's starting to look a bit like a horse race, some of the leaders in the pharmaceutical sector are doing everything they can to create the treatment and get that crucial first-mover advantage in the market. Moderna (NASDAQ: MRNA) has been one of the front-runners for a while now and recently saw some gains on the strength of several new developments.

Moderna Advances, Offers New Hope for COVID-less Future

Immediately, some of those gains came in the form of a major new step forward the company made in fighting the COVID-19 virus. It's leading the largest COVID-19 vaccine study the world has seen to date, with 30,000 volunteers ready to take the vaccine on to see what kind of results it delivers. Volunteers in the testing, at last report, won't know if they're getting a placebo or the actual vaccine, which should help deliver much-needed validity to the results.

Moderna's efforts to develop new means to combat COVID-19 are also getting a boost, as the Biomedical Advanced Research and Development Authority (BARDA) is supplying Moderna an extra $472 million in development funds to help drive its race to a vaccine. The reports noted that Moderna was likely to put that cash to use in the aforementioned Phase 3 study.

As a result, the company made some staggering gains off its previous close of $73.21, and though it's given back some of those gains since the premarket trading bump, as of this writing, it was still trading at $77.47.

Not Being Developed in Isolation

It's far from alone on this front; reports note that a slate of other vaccines—particularly those developed by Chinese companies and Oxford University in Great Britain—are working toward final-stage studies as well. Those studies are focused on Brazil and other areas that have seen especially high numbers, but they're also said to be somewhat less stringent than the testing about to be seen in the US.

In fact, the US also has a big new effort underway, as directed by what's known as the COVID-19 Prevention Network. An operation funded by the US government, this group is set to bring out a new study of a vaccine candidate every month, running “through fall”, which suggests anywhere between three and five new vaccine candidates getting run through the program.

We've already heard about several such efforts underway; the Oxford candidate is set to launch its final study this August, and then Johnson & Johnson (NYSE: JNJ) will have a candidate to follow up in September. Novavax (NASDAQ: NVAX) will have its day in October, and Pfizer (NYSE: PFE) will have its own 30,000 person study on the version it developed with BioNTex (NASDAQ: BNTX) prepared to emerge within the next few weeks.

The Value of a First-Mover Advantage

For most people, it likely doesn't matter who comes out with a vaccine first, just so long as they do. While not everyone will take a vaccine right as it comes out, it's a safe bet that plenty will, just to allay the fears of actually coming down with this disease in general. The company that comes out with the first viable vaccine, therefore, will have the best chance of landing the largest share of that early-adopter market.

The companies that come out with a vaccine to follow, meanwhile, will have to compete on some other point; either they will have to lower their price point to draw customers in or offer a better overall product. Since the products' end results are all the same—you don't get coronavirus—the ability to compete on quality is sharply limited.

However, this may not be quite the horse race some think it is. We've seen as much in the last few weeks, as the US government jumps in to buy up pretty much every treatment that emerges. We saw as much with Gilead Sciences' (NASDAQ:GILD) remdesivir and the Pfizer treatment as well, unfinished as it may be.

If that pattern continues, it may not matter what order these companies finish in, though it's likely better to get in at the front of that line rather than toward the end. The first-mover advantage is usually important to any company's marketing efforts, even when the product in question almost sells itself.

Companies Mentioned in This Article

CompanyBeat the Market™ RankCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Moderna (MRNA)1.8$0.00-100.0%N/AN/ABuy$88.65
Novavax (NVAX)1.5$170.29+1.7%N/A-41.13Buy$124.07
BioNTech (BNTX)1.1$77.00-0.1%N/A-81.05Buy$68.80
Pfizer (PFE)2.5$38.45+0.5%3.95%15.26Hold$38.86
Johnson & Johnson (JNJ)2.4$148.60+0.7%2.72%21.73Buy$164.27
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