Moderna vs. the Lobbyists: Who Has the Upper Hand?

Moderna (MRNA) stock currently sits 30% below the yearly highs reached in early February. Jefferies analyst Michael Yee credits the pullback to various reasons, including a “risk-off tape and rotation away from growth stocks.”

However, the analyst also believes complaints from Public Citizen and other groups to the HHS, NIH and NIAID have played their part. The lobbying groups claim that as taxpayers funded Moderna’s Covid-19 vaccine mRNA-1273’s R&D to the tune of more than 2.5 billion and Moderna is using a “soon-to-be issued” NIH patent (which describes the SARS-COV-2 spike protein’s unique prefusion confirmation), the government should make the vaccine available to all and Moderna should stop profiting from the taxpayers’ investment.

While Yee says the claims “may resonate with the broader public,” he does not foresee the complaints gaining traction due to several factors: “1) vaccines and MRNA’s vaccine are generally now widely available, 2) MRNA has more than executed on its promise to deliver vaccine (already delivered 100M doses) and has actually increased supply to the US to 300M doses in 2021 and 400M doses OUS, and 3) MRNA has already started working on vaccine 2.0 to cover the B.1.351 (S.A.) variant, where data are likely coming in the next few months (i.e., Spring) to protect as a booster against the SA variant and potentially other emerging variants containing the E484K mutation.”

What’s more, considering that the vaccines from Pfizer/BioNTech, Novavax and J&J “all use the prefusion stabilized form of the sequence as well,” the analyst considers the lobbyists claims as “far-reaching.”

Yee also expects Moderna to shortly announce “positive variant data,” however, the analyst believes overall sentiment around the vaccine program has transitioned “from scarcity to oversupply.” Yee notes that most investor questions focus on how much demand there will be for the vaccine in 2022.

With this in mind, Yee reiterated a Hold rating on Moderna shares. Nevertheless, due to the pullback, Yee’s $180 price target stands to line investors’ pockets with gains of 38.5%. (To watch Yee’s track record, click here)

Opinions amongst Yee’s colleagues show there’s no general agreement on where MRNA stock is heading. The bulls are still in charge, however, as 5 Buys and Holds, each, and 2 additional Sells add up to a Moderate Buy consensus rating. Furthermore, the $167.82 average price target suggests 12-month upside potential of 27%. (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.