Moderna: Promising COVID-19 Vaccine Does Not Justify Its Current Market Cap (NASDAQ:MRNA)


Moderna (NASDAQ:MRNA) is a clinical-stage biotech company pioneering a new class of medicines made of messenger RNA (“mRNA”). The company believes that the potential implications of using mRNA as a drug are significant and far-reaching and could meaningfully improve how medicines are discovered, developed and manufactured.

In this article, I give an overview of their clinical program and review the company’s prospects.

The Science of mRNA

mRNAs transfer the information stored in genes and are stored as sequences of DNA. Once a cell needs to produce a protein, the instructions are copied from the DNA to mRNA which then transmits that information to make copies of the required protein.

Moderna believes that mRNA can be used to create a new class of medicines that exceed the impact of recombinant protein-based drugs, which have been used to treat a wide range of diseases. However, recombinant protein technology is unable to reach intracellular and membrane proteins, which represent almost 2/3 of the proteins in humans.

Clinical Programs

Moderna has over 20+ clinical programs in development across 6 modalities, as shown in Figure 1. Each modality is a group of potential mRNA medicines with shared product features, mRNA technologies, delivery technologies, and manufacturing processes. The company has prioritized 2 core modalities in prophylactic vaccines and in systemic secreted and cell surface therapeutics and is further pursuing 4 exploratory modalities in cancer vaccines, intratumoral immuno-oncology, localized regenerative therapeutics, and systemic intracellular therapeutics.

Figure 1: Moderna’s Clinical Pipeline (Source)

Prophylactic Vaccines

Moderna’s prophylactic vaccines are designed to prevent or control infectious diseases by safely pre-exposing the immune system to a small quantity of an antigen so that the immune system is prepared to fight the pathogen if exposed in the future, to prevent infection or disease.

To date, its most famous program is the mRNA-1273 which is a potential vaccine being developed to address the SARS-CoV-2 outbreak, in collaboration with the National Institute of Health (“NIH”) and the Coalition for Epidemic Preparedness Innovations (“CEPI”). The program was developed in record time with the first clinical batch completed in 25 days from sequence selection to vaccine manufacture. The batch was shipped to the NIH to use in the phase 1 study on 24 Feb 2020 and the first human trial was started in March 2020. mRNA-1273 is expected to be advanced to a phase 2 trial in Q2 2020. The company recently announced a $483M grant from the Biomedical Advanced Research and Development Authority (“BARDA”) to fund manufacturing scale-up to enable large-scale production in preparation for the pandemic response.

Beyond COVID-19, the company also has several other vaccine candidates against other infectious diseases, with its most advanced program being mRNA-1647 which has finished phase 2 enrollment for Cytomegalovirus (“CMV”). Figure 2 lists a summary of clinical data for its prophylactic vaccine’s modality.

Figure 2: Moderna’s Prophylactic Vaccine Clinical Data Summary (Source)

Systemic Secreted and Cell Surface Therapeutics

The company’s systemic secreted therapeutics modality is designed to increase the levels of desired secreted proteins that are either in circulation or in contact with the extracellular environment, to achieve a therapeutic effect in the tissue or cell types.

The company has 5 development candidates in this modality, with the most advanced being the mRNA-1944 which is being evaluated in a phase 1 study against the Chikungunya virus. There are 3 other secreted programs which are all in preclinical development: AZD7970 for the treatment of heart failure, mRNA-3630 for Fabry disease and mRNA-6231 for autoimmune disorders. In addition, there is a cell surface therapeutic program in preclinical development, mRNA-6981, for autoimmune hepatitis. A clinical data summary of this modality is listed in Figure 3.

Figure 3: Moderna’s Systemic Secreted and Cell Surface Therapeutics Clinical Data Summary

Cancer Vaccines

The company’s cancer vaccines are designed to treat or cure cancer by enhancing immune responses to tumor neoantigens. Moderna is focusing on the use of mRNA to express neoantigens found in a tumor in order to elicit an immune response via T cells that recognize those neoantigens. Such neoantigens can either be unique to a patient or can be related to a target found across groups of patients.

This modality has two programs in development: a personalized cancer vaccine, and a KRAS vaccine. Both programs are conducted in collaboration with Merck (NYSE:MRK). A clinical data summary of this modality is listed in Figure 4.

Figure 4: Moderna’s Cancer Vaccine Clinical Data Summary

Intratumoral Immuno-Oncology Overview

The company’s intratumoral immuno-oncology modality is designed to treat by transforming the tumor microenvironment to elicit T cell responses against tumors. The company’s mRNA technology allows for the combination of multiple therapeutics that can be directly injected into a tumor as well as in distal tumors. There are currently three development candidates: mRNA-2416, mRNA-2752, and MEDI1191. A clinical data summary of this modality is listed in Figure 5.

Figure 5: Moderna’s Intratumoral Immuno-Oncology Clinical Data Summary

Localized Regenerative Therapeutics

The company’s localized regenerative therapeutics modality is designed to develop mRNA medicines to address injured tissues by allowing for the local production of proteins that provide a therapeutic benefit in the injured tissue.

There is 1 program, AZD8601, which is being developed with AstraZeneca (NYSE:AZN). AZD8601 has completed a phase 1a/b trial in which both dose-dependent protein production and a pharmacologic effect was observed, as measured by changes in local blood flow in patients. A clinical data summary of this trial is listed in Figure 6.

Figure 6: Localized Regenerative Therapeutics Clinical Data Summary

Systemic Intracellular Therapeutics

The company’s systemic intracellular therapeutics modality is designed to achieve a therapeutic effect in tissues or cell types by increasing the levels of intracellular proteins. The initial focus within this modality is on rare genetic diseases.

There are currently 4 development candidates: mRNA-3704 for methylmalonic acidemia (“MMA”), mRNA-3927 for propionic acidemia (“PA”), mRNA-3283 for phenylketonuria (“PKU”) and mRNA-3745 for glycogen storage disorder type 1a (“GDD1a”). A preclinical data summary of this modality is listed in Figure 7.

Figure 7: Systemic Intracellular Therapeutics Clinical Data Summary


As of 31 December 2019, cash and equivalents were $1.26B. The company also raised $550M in net process from a recent financing round, has up to $185M in additional funding available from grants and has the recently announced $483M in grants from BARDA. With its huge war chest, the company has enough cash runway to fund multiple years of operations.

This is important as the company looks to advance multiple clinical programs, as listed in Figure 8. While the company has made impressive progress in building up and advancing its clinical programs, its clinical pipeline is relatively early-stage with the current most advanced program mRNA-1647 starting phase 3.

The development timeline of mRNA-1273 has been impressive and if successful, provides a solid proof-of-concept for Moderna’s mRNA platform. While it is important that the company is contributing to the fight against COVID-19, expectations must be managed properly given that there are no mRNA medicines currently approved yet. mRNA-1273 is also not the most advanced vaccine for COVID-19 and that honor belongs to Hong Kong-listed Chinese Biotech, CanSino Biological, whose vaccine candidate is already in phase 2 trials. Given the expected limelight on COVID-19, there is also a limit to how much Moderna can profit from its product, even if it is successfully approved. On the bright side, the company is already planning for manufacturing on a large scale to enable as many people to be vaccinated as soon as possible.

Lastly, the company is also affected by the COVID-19 pandemic and has paused the enrollments of certain clinical trials and expects delays in several other programs.

Figure 8: Moderna’s Clinical Development Plans (Source)


Moderna is a leader in mRNA technology and their development work of the COVID-19 vaccine, mRNA-1273, has been impressive and a strong proof-of-concept of their technology and capabilities. With a strong balance sheet, Moderna is well-poised to advance its clinical programs without further cash raise.

Having said that, its share price has skyrocketed by 100% this year due to its work on the COVID-19 vaccine and being in the limelight and it currently has a market cap of around $14B. Given that the company only has 1 upcoming phase 3 trial for CMV vaccine, and the rest of its clinical pipeline are all early-stage, I find it hard to justify its premium market cap.

While I will keep a keen eye on the progress of mRNA-1273 and hope that it will be successful, I will not be making any investments in the company as I cannot justify its current market cap given the risk-rewards consideration.

As always, investors should conduct their own due diligence and consider their risk appetites and time horizon before taking up any position. I specialize in covering tech and biotech firms. Readers who are interested are welcome to follow me to read and comment on my articles.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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