Is It Finally Time to Buy Moderna?

Moderna, the biotech darling of the pandemic era, has seen its stock plummet by 93% from its peak. The company, once hailed as a revolutionary force in mRNA technology, now finds itself at a crossroads. But is this the perfect storm for a comeback, or is Moderna's best days behind it? Let's dive into the numbers, the science, and the strategic moves to find out if it's finally time to buy Moderna.



The Numbers Don't Lie

Moderna's financial performance has been a rollercoaster ride. In the fourth quarter of 2024, the company reported a total revenue of $1.0 billion, a 66% year-over-year decrease. Net product sales plummeted to $938 million, primarily due to the earlier launch of the updated COVID-19 vaccine in the United States, which shifted sales into the third quarter. International sales were also lower, reflecting the phase-out of advance purchase agreements. The cost of sales increased to 79% of net product sales, up from 33% in the previous year, due to inventory write-downs and wind-down costs.

The company reported a GAAP net loss of $(1.1) billion and a GAAP EPS of $(2.91) for the fourth quarter of 2024. For the full year, the net loss was $(3.6) billion, with a diluted EPS of $(9.28). These numbers are a stark contrast to the company's peak performance during the pandemic, when its COVID-19 vaccine, Spikevax, generated billions in revenue.



The Science Behind the Stock

Moderna's mRNA technology has been a game-changer in vaccine development. Unlike traditional vaccines, mRNA vaccines use a small segment of the virus's genetic material to instruct cells to produce harmless spike proteins, triggering an immune response. This technology allows for rapid production and flexibility in vaccine development, making it suitable for various pathogens.

Moderna's COVID-19 vaccine demonstrated an efficacy rate of 94.5% in preventing symptomatic COVID-19, showcasing the potential of mRNA vaccines. The company has also made significant advancements in stabilizing mRNA vaccines for practical storage, with its vaccine remaining stable at standard refrigeration temperatures for up to 30 days.

Strategic Moves and Pipeline Updates

Moderna has been focusing on cost reduction, product approvals, and sales growth to enhance its long-term prospects. The company aims to reduce its cash cost expenses by $1.0 billion in 2025 and an additional $0.5 billion in 2026. This cost reduction strategy is crucial for improving the company's financial health and reinvesting savings into research and development.

Moderna has submitted three investigational mRNA products for regulatory approval, including a next-generation COVID vaccine, an RSV vaccine for high-risk adults aged 18 to 59, and a flu/COVID combination vaccine. The company expects multiple approvals starting in 2025, which will support its long-term growth. For example, the FDA has accepted Moderna's Biologics License Application (BLA) for its next-generation COVID-19 vaccine (mRNA-1283) and has assigned a PDUFA goal date of May 31, 2025.

Risks and Challenges

Despite its strategic focus, Moderna faces several risks and challenges. The biotechnology sector is highly competitive, with other companies also developing mRNA vaccines and therapies. Moderna must continuously innovate and differentiate its products to maintain a competitive edge. Regulatory hurdles, public vaccine hesitancy, and financial performance are also significant challenges that the company must navigate.

Conclusion

Moderna's 93% decline in stock value presents a unique opportunity for investors. The company's strategic focus on cost reduction, product approvals, and sales growth aligns with its long-term growth prospects. However, investors must be aware of the risks and challenges that Moderna faces in executing its strategy. With regulatory approvals, cost reduction initiatives, pipeline milestones, and strategic collaborations, Moderna has the potential to recover and thrive in the biotech sector. But is it finally time to buy Moderna? Only time will tell, but the numbers, the science, and the strategic moves suggest that the company is poised for a comeback.