Moderna’s shares have risen 239% so far this year, and the biotech company, which has no approved drugs, has a market capitalization of more than $ 24 billion.
But in a note published Monday morning, Jefferies analyst Michael Yee writes that the title can still climb.
“We believe the company’s Covid-19 vaccine, mRNA-1273, will work and that large orders will arrive,” he wrote.
Yee thinks the Food and Drug Administration could issue an emergency use authorization for the vaccine early next year.
The analyst initiated the hedging of Moderna shares with a purchase note and set a price target of $ 90. The stock traded at $ 66.37 Monday morning, up 6%.
Of the 14 analysts followed by FactSet with ratings on Moderna, 13 note it a purchase while another notes it an expectation.
“We think billions of sales would be reasonable and there would be high demand in the first one to two years,” wrote Ye. He estimates sales of the vaccine at $ 2 billion in the first year of marketing, but said the number could theoretically be much higher.
Yee wrote that if Moderna’s Covid-19 vaccine succeeds, it would validate the company’s vast pipeline of messenger RNA-based drugs, which rely on the same relatively unproven technology as the Covid-19 vaccine.
“That’s the key: if it works, it’s not just huge dollars coming in, but validating the platform with a lot of pipeline behind,” wrote Yee. “This is analogous to any biotechnology that proves that a platform works and can be applied at all levels. “
Last week, shares of Moderna came across reports that disagreements with government scientists were delaying the start of the phase 3 trial of its Covid-19 vaccine. At the time, Barron’s noted that the disagreements reported highlighted a potential risk for biotechnology companies not having products on the market at the final stages of the vaccine race: they could prove their depth in the race for regulatory approval. Moderna said at the time that many of its employees had decades of industry experience and had run phase 3 programs in the “top five vaccine companies”.
Yee acknowledged that if the vaccine doesn’t work, the stock could be “badly hit”. But he wrote that he “thinks the stock could appreciate 25% to 50% in the next six to 12 months”.
Next steps for Moderna include the release of full data from the Covid-19 phase 1 study, scheduled for this month, and the start of the large Phase 3 study, also scheduled for this month.
Write to Josh Nathan-Kazis à [email protected]