Moderna stock gained ground Wednesday after its updated Covid booster generated a strong antibody response against the omicron variant.
The booster is known as a bivalent shot. It combines strategies to block two Covid-causing viral strains, including the mass-circulating omicron variant. The updated booster generated almost twice the amount of antibodies against omicron compared to the original booster, a half-sized dose of Moderna's primary vaccine.
"Looking at these data alongside the durability we saw with our first bivalent booster candidate, we anticipate more durable protection against variants of concern with (the bivalent booster called) mRNA-1273.214, making it our lead candidate for a fall 2022 booster," Chief Executive Stephane Bancel said in a written statement.
On today's stock market, Moderna stock jumped 2.2% to 148.53.
Moderna Stock: Regulatory Submissions Loom
Moderna tested the new booster in people who tested negative for Covid prior to the boost. A month after vaccination, the updated booster led to an eightfold increase in omicron-blocking antibodies compared with participants' baseline level of antibodies.
Virus-blocking antibodies also increased against other variants, including alpha, beta, gamma and delta compared to the original booster. Importantly, side effects were in line with the prior booster vaccine, Moderna said in a news release.
Moderna now plans to submit the interim analysis and data to regulators in the coming weeks.
'Rapidly Eroding' Demand
But SVB Securities analyst Mani Foroohar says demand is "rapidly eroding" for boosters. In a note on Tuesday, Foroohar cut his price target on Moderna stock by 10 to 70.
He noted the European Commission recently delayed delivery of Moderna's booster doses from the second quarter to the second half of 2022 or first half of 2023. Takeda Pharmaceutical also recently transferred marketing authorization for the Covid vaccine in Japan back to Moderna.
Foroohar continues to see $6.76 billion and $5.79 billion in worldwide sales of Moderna's vaccine in 2023 and 2024, respectively. But he sees "incrementally greater downside risk" to his estimates.
"Though it is possible 2023 numbers could paradoxically move upward in response to a demand cliff, as 2022 contracted sales slide into next year, Moderna shares would trade sharply down on the resulting 2022 guidance cut," he said.
Moderna's Second Act?
Moderna needs a second act following its Covid premiere, he said.
"We continue to see aggressive (business development) by the company — using Covid profits and currently overvalued shares as currency — to acquire durable revenue streams as they key upside risk to our rating," he said.
Foroohar reiterated his underperform rating on Moderna stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
