Modern (MRNA) jumped on an unexpected first-quarter gain on Thursday even as sales tumbled amid falling demand for Covid vaccines.
During the first quarter, Moderna earned 19 cents per share. Profits fell 98% year over year. But Moderna shocked Wall Street when it turned a profit. Analysts had expected a loss per share of $1.75. Sales also fell 69% to $1.86 billion, but topped calls for $1.18 billion.
Third Bridge analyst Lee Brown says Moderna is well on the other side of its Covid peak. The company expects only $200 million to $300 million in sales in the second quarter and $5 billion for the year based on deals currently signed for its only approved product, the Covid vaccine called Spikevax.
“As our experts have repeatedly emphasized, Moderna’s late-stage pipeline is paramount to the success of the business as we have fully transitioned into a post-pandemic environment,” Brown said in a note to clients. .
Trading today, Moderna stock jumped 3.2% to close at 134.33. Stocks have long been trading below their 50- and 200-day moving averages, according to MarketSmith.com.
What’s next for Moderna Stock?
The Covid vaccine generated the bulk of Moderna’s sales at $1.83 billion. The remaining $34 million came from grants and collaborations revenue.
Brown notes that the frontline pace came mostly from delayed Spikevax deliveries in 2022.
But that may be unsustainable. According to FactSet, Moderna’s projection of $5 billion in sales this year fell short of analysts’ calls for $7.73 billion. Moderna says it is still negotiating additional deliveries this year in key markets, including the United States, Japan and the European Union.
Beyond Covid, Moderna hopes to get a vaccine approved this year to prevent respiratory syncytial virus, or RSV, in the elderly. On Wednesday, the Food and Drug Administration approved a shot of GSK (GSK). He’s the first to get approval. Pfizer‘s (PFE) could also win the FDA’s blessing this month.
Brown estimates that the annual RSV vaccine market could exceed $10 billion worldwide.
“But our experts stress that (Moderna) will now face an established competitor given yesterday’s FDA approval of GSK’s RSV vaccine, Arexvy,” he said.
Six major launches expected
Moderna is also gearing up for six major vaccine launches from its respiratory franchise, including injections to block Covid, RSV, flu and combinations. These could generate annual sales between $8 billion and $15 billion by 2027, Brown said.
Moderna stock investors are also watching the company Merck (MRK) Cancer Vaccine Partnership. In Phase 2 testing in melanoma patients, a combination of the vaccine and Merck’s Keytruda reduced the risk of relapse or death by 44% compared to Keytruda alone. It could “profoundly” change the treatment of melanoma, he said.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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