Shares of biopharma Moderna (NASDAQ:MRNA) advanced 124.9% during the first half of this year, according to S&P Global Market Intelligence. The rally extends gains made since early 2020, when the company emerged as a COVID-19 vaccine contender, and then delivered on that promise later in the year.
It’s a name that needs little in the way of an introduction. Moderna joins Johnson & Johnson (NYSE:JNJ), Novavax (NASDAQ:NVAX), and a partnership between Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) as the core suppliers of the vaccines aimed at curbing the coronavirus contagion. Moderna’s mRNA-1273 was approved by the FDA for emergency use in December of last year, though investors were willing to reward the company before and after that green light.
And well they should. Product revenue for the developmental company grew from essentially nothing a year earlier to $1.7 billion for the three-month stretch ending in March, with all of it consisting of COVID vaccine sales.
In the meantime, the company has continued to expand on the potential of mRNA-1273 as well as move forward with trials of other vaccine and treatment candidates. It also has other trials underway, such as testing of its mRNA technology as a means of treating cancer, autoimmune disease, and cardiovascular disease — though for the foreseeable future, evolving strains of COVID will keep the organization busy.
It’s tempting to step into (or stick with) one of the market’s hottest biotech stocks that’s performing well for all the right reasons. The pandemic could be with us for a while — perhaps permanently if new strains keep surfacing — and Moderna’s answer thus far appears to be the least problematic. J&J’s vaccine has been linked to the development of Guillain-Barre syndrome, while Pfizer’s might lead to heart inflammation in rare cases. Moderna’s mRNA solution can also cause the same myocarditis, although it’s highly effective, and if nothing else, it’s increasingly available in an environment where something is better than nothing.
With shares up nearly 900% since the coronavirus outbreak went worldwide last year, though, existing shareholders may want to start thinking about an exit plan.
While Moderna has provided a beacon of hope, its effort and potential are not only well publicized and fully priced into shares, but they might also be more than priced in. Even the usually aggressive analyst community agrees that shares are only worth on the order of $177 right now, while the stock is trading at a frothy $238.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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