Boosting Our Moderna COVID-19 Vaccine Sales Projections

In conjunction with Moderna’s MRNA March 24 vaccines day, we’re raising our fair value estimate to $232 from $202 after significantly boosting our long-term (2024-plus) sales projections for Moderna’s COVID-19 vaccine. Since our initiation on Moderna in April 2021, we have assumed that after the pandemic, annual COVID-19 vaccinations for infants (with no pre-existing protection to the virus) and individuals over 65 (protection against severe disease likely to wane over time) would be required, as the virus is likely to remain endemic. We still see these as the prime targets for annual vaccines, but we have widened the target market in our base case to include individuals between the ages of 50-64 who are at higher risk of severe disease. We continue to assume that most younger adults maintain adequate cell-based immunity and a broad array of antibodies following a third dose, giving them sufficient protection against severe disease. Overall, this boosts our assumption for Moderna’s COVID-19 vaccine sales to more than $4 billion annually starting in 2024, up from our prior assumption of $2.5 billion. Our 2022 Moderna COVID-19 vaccine sales estimate stands at $21.6 billion, after adjusting for additional orders from Japan and reduced expectations from the African Union and Covax. We remain hesitant to assume additional sales beyond current contracts and options for the second half of the year, given high uncertainty around the breadth of guidance for fourth-dose boosters, minimal visibility on evolution of potential vaccine-evading variants, and unclear significance of waning antibodies from third-dose boosters. Moderna has 25 development candidates in clinical trials, and even if sales dip in 2023-2024 ahead of new launches from the firm’s pipeline in the absence of new COVID-19 variants, we’re confident in the long-term sales potential of the firm’s diversified pipeline. We think Moderna is on its way to building a narrow moat, and we assign them a positive moat trend.

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