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Moderna: Overvalued Despite Strong Pipeline Developments

There’s no stopping the Moderna (MRNA) juggernaut. Shares are up by 330% year-to-date, with the latest uptick following the company’s annual R&D event.

Moderna provided an update on its Covid-19 program and said that in a phase 2 study of its third dose of mRNA-1273, for all variants of concern, the vaccine generated robust antibody responses. Moderna is hoping to receive Emergency Use Authorization (EUA) from the FDA for its Covid-19 booster shots. The biotech giant has also completed its rolling BLA submission for mRNA-1273 (to be called Spikevax) for which it hopes to get full approval from the FDA.

Needham’s Joseph Stringer thinks the approval decision could come in “early” November 2021, although if the FDA further accelerates the review process, a decision could be made sooner.

However, the analyst – and investors – were particularly intrigued by the announcement of two new combination vaccines in the pipeline against respiratory viruses – COVID+Flu and RSV +hMPV.

“This is an initial step toward an “all-in-one” pan-respiratory vaccine, which could hold significant value given potential for 1) high patient compliance/ better uptake, 2) value for payors, and 3) overall long-term cost reduction to the healthcare system,” the analyst said. “While there are technical, development, and regulatory hurdles that need to be cleared, the foundation is being laid, and we await additional updates.”

Investors might still be loading up on shares, but with a market cap now exceeding $180 billion, Stringer is reticent to recommend investors take a chance on Moderna right now. The analyst calls mRNA-1273 a “landmark success,” and anticipates the mRNA platform will yield “long-term value.” “However,” Stringer summed up, “We think the current collective value of all programs/pipeline do not justify current levels.”

Accordingly, Stringer stays on the sidelines with a Hold rating and no fixed price target in mind. (To watch Stringer’s track record, click here)

The rest of the Street appears to be on the same page. Based on 8 Holds, 4 Buys and 2 Sells, the stock has a Hold consensus rating. The analysts feel the shares are significantly overvalued; at $328, the average price target implies the stock will be changing hands for a 22% discount a year from now. (See MRNA stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.