Shares in Moderna (MRNA) spiked 11% in Tuesday’s after-hours trading after the company announced a $1.525 billion supply deal with the U.S. government for 100 million doses of its Covid-19 vaccine mRNA-1273.
According to the statement, the award is for the manufacturing and delivery of 100 million doses of mRNA-1273 including incentive payments for timely delivery of the product.
With the previous award of up to $955 million from BARDA for the development of mRNA-1273 to licensure, this latest announcement brings the U.S. government commitments for early access to mRNA-1273 to up to $2.48 billion.
Plus the U.S. government, as part of Operation Warp Speed, will also have the option to purchase up to an additional 400 million doses of mRNA-1273.
“We appreciate the confidence of the U.S. government in our mRNA vaccine platform and the continued support,” said Stéphane Bancel, Moderna’s CEO. “We are advancing the clinical development of mRNA-1273 with the ongoing Phase 3 study being conducted in collaboration with NIAID and BARDA. In parallel, we are scaling up our manufacturing capability with our strategic partners, Lonza, Catalent and Rovi, to address this global health emergency with a safe and effective vaccine.”
mRNA-1273 is an mRNA vaccine against COVID-19 encoding for a prefusion stabilized form of the Spike (S) protein, and is being co-developed by Moderna and investigators from the National Institute of Allergy and Infectious Disease’s (NIAID) Vaccine Research Center.
The Phase 3 COVE study of mRNA-1273 began on July 27; enrollment is on track to complete in September.
With optimism building over mRNA-1273, shares in Moderna have exploded by over 250% year-to-date. And the stock boasts a bullish Strong Buy consensus from the Street alongside a $94 average analyst price target– indicating further upside potential lies ahead.
Oppenheimer analyst Hartaj Singh writes: “While MRNA navigates vaccine supply agreements and a potential commercialization of mRNA-1273, we anticipate volatility in the shares to continue. Nonetheless, clinical updates from P2 and eventually P3, in parallel with a further clarified regulatory path to approval, position MRNA well over the coming 12-18 months, in our view.”
Accordingly, Singh keeps his buy rating on the stock with a $108 price target (57% upside potential), adding that MRNA’s peak annual revenue of $5B to $10B for mRNA-1273 could be achieved in 1/2 the time required by its BioPharma peers historically, fueled by a scalable platform and strong execution. (See Moderna stock analysis on TipRanks).
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