Moderna Partners with Metagenomi; Shares Rise

Moderna (MRNA) has signed a strategic research and development collaboration agreement with Metagenomi, a genetic medicines company. Following the news, shares of the biotechnology company increased 3.4% to close at $348.64 on Tuesday.

Through this partnership, Moderna and Metagenomi will focus on advancing new gene editing systems for in vivo human therapeutic applications.

Markedly, Metagenomi’s strong portfolio of next-generation gene editing tools and Moderna’s mRNA platform, along with lipid nanoparticle (LNP) delivery technologies, will help the companies to develop curative therapies for patients with serious genetic diseases.

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The CSO of Moderna Genomics (mGx), Eric Huang, said, “Metagenomi has demonstrated the power of its proprietary metagenomics approach that mines the Earth’s natural environment to discover next-generation gene editing tools and has developed discovery capabilities with the potential to address multiple diseases. Their discovery platform and expertise will expand Moderna Genomics’ ongoing efforts to develop innovative in vivo gene editing therapies to address a significant unmet medical need.”

As per the terms of the deal, an upfront cash payment will be made to Metagenomi. The genetic medicines company will also be eligible to receive certain target option exercise fees, along with development, regulatory and commercial milestone payments.

Additionally, tiered royalties on net sales of any product commercialized by Moderna will also be paid to Metagenomi. Further, an equity investment will be made by Moderna in Metagenomi in the form of a convertible note. (See Moderna stock charts on TipRanks)

Analysts Recommendation

Following the collaboration, Piper Sandler analyst Edward Tenthoff reiterated a Buy rating on the stock with a price target of $445 (27.64% upside potential).

In a note to investors, Tenthoff said that Metagenomi’s strong intellectual property estate should enable Moderna to develop novel gene editing therapies.

Overall, the stock has a Hold consensus rating based on 5 Buys, 5 Holds and 3 Sells. The average Moderna price target stands at $366.56 and implies upside potential of 5.1% to current levels. Shares have gained 87.4% over the past six months.

Risk Analysis

According to the new TipRanks’ Risk Factors tool, Moderna is at risk mainly from three factors: Tech and Innovation, Finance and Corporate, and Legal and Authority, which contribute 29%, 22% and 19%, respectively, to the total 98 risks identified for the stock.

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