Modern (NASDAQ: MRNA) announced its share of good news over the past few months. The biotechnology company delivered positive results in the Phase 3 trial of its coronavirus vaccine. The U.S. Food and Drug Administration granted the product permission for emergency use in the weeks that followed. Moderna has also signed 2021 pre-sale agreements representing more than $ 11 billion in revenue. This is a big deal for a company that did not have a product revenue a few months ago.
It all sounds promising. But there is some news that is even better. This means that Moderna’s vaccination is feasible for long-term use. Ready to find out more? Read on.
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A big unknown
One major unknown regarding all the vaccines developed was the protection period against coronavirus. In the cases of Moderna and competitors such as Pfizer (NYSE: PFE) and Novavax (NASDAQ: NVAX), measures to neutralize antibody levels weeks after vaccination are strong. These are the antibodies that are known to block infection. But it was still too early to know if these antibody levels would remain strong for at least a year.
If the antibody levels drop significantly, the effectiveness of the vaccine also decreases. And when these antibodies disappear completely, the body is left defenseless. Here’s a possibility that researchers dreaded: a vaccine that only leads to a strong antibody response for a month or two. This would mean that each person would have to be vaccinated several times a year.
In December, Moderna provided optimistic news in a letter to the editor that in The New England Journal of Medicine. The company examined the neutralizing antibody levels in 34 participants in phase 1 three months after receiving the second vaccine. While levels, as expected, fell slightly, they remained high, the company reported. And they remained higher than those of coronavirus patients recovering.
Even better news came earlier this month. Stephane Bancel, CEO of Moderna, said the vaccine could provide protection for several years. It highlights the most important unknown of how long antibodies will last.
Moderna only started clinical trials in March. It is therefore impossible for the company to draw this conclusion from 12 months or longer trial data. But Bancel explains the idea by saying that “antibody decay” in people vaccinated with the Moderna vaccine was slow.
A booster shot
Of course, this only applies to the Moderna vaccine. The duration of Pfizer and BioNTechvaccine or competing vaccine candidates are still unclear. This news therefore puts Moderna at the forefront with a very important element of the vaccination question. Moderna has not yet recommended how often people should receive the vaccine. But the company plans to test the possibility of a booster being given one year after a person’s two-dose vaccination. This study will begin in July.
Moderna’s plan for a booster one year after the first vaccination – or even a full two – dose vaccination annually – is the ideal scenario. Here are the benefits: it gives Moderna enough time to manufacture and deliver doses. And more people can be protected with a certain number of doses if vaccinated annually rather than every few months.
An annual vaccination also means that health care systems have enough time to arrange vaccinations. And people will be more likely to do their vaccinations; most would not be vaccinated every few months over the long term.
What does all this mean for investors?
This news removes a significant element of uncertainty. If Moderna’s vaccine had only worked for a few months, it would have been disastrous for the company and its share price – especially if a competing vaccine manufacturer had produced longer immunity.
That said, Moderna is still a risky investment. For now, the revenue and performance of the biotechnology company depends on the coronavirus vaccine (the only commercial product.) If something goes wrong, the stock could tumble seriously.
But Moderna is not as risky as last year – when the coronavirus vaccination program was in its early stages and mRNA technology has not yet been validated. It surpassed the barriers of clinical trials, emergency consent and the duration of the vaccine. This is good news, which has established Moderna as a good player in the coronavirus vaccine market. And that means the Moderna share, which rose more than 400% last year, is heading for a second winning year.