Moderna said it received $400 million of cash in deposits for the supply of its potential mRNA-1273 coronavirus vaccine, adding that the company is in discussions with a number of countries for further orders.
Speaking at Moderna’s (MRNA) second-quarter earnings presentation, CEO Stéphane Bancel said that smaller volume agreements for its experimental Covid-19 vaccine have been priced in the range of $32 to $37 per dose.
“Larger volume agreements under discussion will be at a lower price for higher volumes,” Bancel said. “In the endemic period, pricing considerations will follow traditional dynamics and market forces, including vaccine efficacy and the competitive landscape. We will look to price in line with other innovative commercial vaccines.”
“As we pivot to a commercial stage company, we recognize the need for responsible pricing in the face of the pandemic,” Bancel added.
Moderna has recently been awarded up to $472 million by the US Biomedical Advanced Research and Development Authority (BARDA) to support late stage clinical development of its mRNA vaccine candidate, taking the total award amount to $955 million. The latest grant will be used to fund the drugmaker’s expanded Phase 3 study of mRNA-1273, which includes 30,000 participants in the US and started on July 27. Moderna said that the company is on track to complete enrolment in September.
Moderna currently has 23 mRNA development candidates in its portfolio with 13 in clinical studies. The drugmaker updated 2020 guidance to reflect investments related to the development of mRNA-1273. The durgmaker expects net cash used in operating activities and for purchases of property and equipment to be between $0.65 to $0.85 billion, including the customer deposits received as of July 31.
“We expect the cash impact of COVID-related investments to be between $0.55 billion to $0.75 billion in 2020,” the company said.
Back in May, Moderna raised $1.3 billion to scale up at risk manufacturing capacity in anticipation of a potential approval for mRNA-1273.
“We started investing the proceeds for additional capital equipment at our Massachusetts plant, as well as the Lonza plant in New Hampshire and in Switzerland, ordering raw materials at large-scale, and hiring additional personnel to make mRNA-1273,” the company added.
Shares in Moderna have exploded 287% so far this year, and Wall Street analysts have a Strong Buy consensus on the stock’s outlook. Looking ahead, the $93.38 average price target suggests an additional 23% upside potential lies ahead.
Meanwhile, five-star analyst Cory Kasimov at J. P. Morgan reiterated a Hold rating on the stock, saying that as the company continues to advance a coronavirus vaccine, “pricing strategy could become an increasing source of controversy”.
“While management put forth a detailed argument supporting its strategy, we do not believe premium pricing to multiple other vaccines is sustainable (assuming at least a few make it to market),” Kasimov wrote in a note to investors. “Bigger picture, we remain optimistic on MRNA’s long term prospects but are having difficulty justifying much upside at current levels.” (See MRNA stock analysis on TipRanks).
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