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A market cap of $ 100 billion is the blue sky state of affairs for Moderna: Analyst

The medic Robert Gilbertson loads a syringe with the vaccine Moderna Covid-19.

APU GOMES | AFP | Getty Images

Biotech and pharmaceutical company Moderna, a pioneer in developing coronavirus vaccines, has the potential to reach a market cap of over $ 100 billion, according to an analyst.

When asked what the blue sky scenario could look like for Moderna, whose coronavirus vaccine is 94% effective against severe Covid infections and who is already working on a booster shot to prevent the Hartaj Singh variant, which appears for the first time in South Africa CNBC, managing director and senior biotechnology analyst at Oppenheimer, told CNBC on Thursday that sales histories from similar companies showed what Moderna could see in the future.

“We’re alerting people to other companies in the biotech sector who have peaked or achieved a rating when their first line of products was launched. Companies as diverse as Alexion, Regeneron, and Vertex are currently essentially peaking at about ten times future sales, future sales three to five years later. “

“I think with Moderna’s coronavirus vaccine franchise they are also starting to develop flu vaccines that should hit the market in the next few years. You know we could see a $ 10 billion franchise in five to seven years. If If you put ten times the sales multiple, you can do the math, then it’s a company with a market capitalization of over $ 100 billion, “he told CNBC’s Street Signs Europe. The market value is currently just over 57 billion US dollars.

Moderna shares rose 3% in premarket trading on Thursday as fourth-quarter revenue of $ 571 million far exceeded estimates of $ 318.9 million and came in at $ 14 million in the fourth quarter of 2019.

Covid-19 vaccine sales were projected to reach $ 18.4 billion in 2021, following $ 199.87 million in sales of Covid-19 vaccines in the fourth quarter. However, the company reported a quarterly stock loss of 69 cents, more than the 35 cents expected loss by analysts.

In the income statement, CEO Stephane Bancel said 2020 will be a historic year for Moderna and 2021 will be a “turning point” for the company.

“We used to believe that mRNA would lead to approved drugs, and our ambitions were constrained by the need for regular fundraising and multi-year cash holdings to manage funding risk. We now know that mRNA vaccines can be highly effective and approved and we are a cash flow generating trading company, ‘he said.

“We plan to accelerate and significantly increase our investment in science and expand our development pipeline faster. By implementing our priorities for 2021, we will advance our mission to deliver on the promise of mRNA science, a new generation of transformative medicines for patients This is just the beginning, “he said.

Booster vaccination

The drug maker announced on Wednesday that it would begin testing its new vaccine booster shot, Covid-19, which is said to offer better protection against a new variant of the virus, first discovered in South Africa. The biotech company said it sent cans of the shot to the U.S. National Institute of Health for testing.

Moderna’s current two-dose burst provokes a weaker immune response against the South African strain of the virus, which has been classified as more infectious than other variants, although the company said the antibodies in patients remain above levels expected to be prior to the virus protect.

“Moderna is committed to making as many updates as needed to our vaccine until the pandemic is under control,” Bancel said in a press release. “We hope to show that booster doses can be given at lower doses when needed, which will allow us to make many more doses available to the global community when needed in late 2021 and 2022.”

Separately, the company announced on Wednesday that it is expected to produce up to 700 million doses by 2021 and 1.4 billion Covid-19 vaccine doses by 2022, assuming the vaccine will be administered at its current level of 100 micrograms .

Should the vaccine turn out to be effective at a lower dose, the company could deliver up to 2.8 billion doses in 2022. Moderna has signed a contract with the US government to supply 300 million cans.

Disclaimer: Hartaj Singh does not hold any position in Modernas shares.

– CNBC’s Berkeley Lovelace contributed to this story.

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