Moderna ( MRNA -2.23% ) has been one of the better-performing large-cap biotechs this year. The company's shares are up 404% to date and have soared 515% over the trailing-12-month period (as of writing). The stock reached $176.66 earlier this year after a major clinical milestone but has since dropped to around $148. The question remains: Does this pullback signal that Moderna has little to no upside left, or can the stock still deliver outstanding returns?
Moderna's performance has varied significantly over the past five years. While it achieved success during the early pandemic years by developing one of the leading coronavirus vaccines, its financial results worsened as demand declined. The market was skeptical that Moderna's mRNA platform could achieve massive commercial success beyond infectious diseases.
However, recent phase 3 clinical trial results for intismeran autogene, an investigational personalized mRNA-based cancer vaccine, have changed this perception. Intismeran autogene, tested in patients with melanoma as a combination therapy with Merck’s Keytruda, showed significant improvements in recurrence-free survival compared to Keytruda monotherapy. This success sets the stage for potential approval and broadens Moderna’s pipeline, which includes other mRNA cancer vaccines in various stages of clinical development.
The approval of Moderna’s flu vaccine, mFLUSIVA, further strengthens its position. mFLUSIVA outperformed some approved influenza vaccines in phase 3 studies, potentially capturing a significant share of the $8.9 billion flu vaccine market. Additionally, analysts estimate that intismeran autogene could generate $5.6 billion in peak revenue, split equally with Merck.
Despite its current valuation of $59.4 billion and a high price-to-sales ratio of 27.5, Moderna remains an attractive long-term investment. Its pipeline includes promising mRNA-based candidates across various therapeutic areas, including challenging targets. While some products may not generate revenue, clinical wins could drive stock appreciation. Over the next five years, Moderna could establish itself as a leading mRNA company with multiple approved products and a robust pipeline, potentially delivering attractive returns for investors.
Source: The Motley Fool
