Stock of the Week: Moderna

Strengths that are also weaknesses

Andrew Willis 10 May, 2021 | 4:38AM
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Andrew Willis: Moderna’s made one of the first new ‘mRNA’ vaccines ever authorized, ahead of more traditional vaccine designs. But how long will its lead last?

Moderna had a head start thanks in part to a vaccine manufacturing process that takes genetic material and easily puts it to work in therapies for pathogens, cancers and rare diseases. We’ve known about mRNA since the 60s, but more recently Moderna helped champion a flexible manufacturing process that made the difference.

Sector strategist Karen Andersen hesitates to give Moderna a competitive moat rating at the moment as she expects multiple new entrants to the mRNA vaccine market during and following the pandemic. And while Moderna has strong intellectual property, there are several other firms – large and small – with patents in the fragmented field. 

We think Moderna needs to make full use of its head start to become an entrenched inoculator. That means making vaccines for as many different diseases as possible – especially in areas with little competition and higher prices.

While Moderna looks to make the most of its momentum to secure a spot in an uncertain environment, investors can at least count on a revenue bump in the future from booster shots.

For Morningstar, I’m Andrew Willis. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Moderna Inc202.77 USD2.49Rating

About Author

Andrew Willis

Andrew Willis  is Content Editor for Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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