MRNA - Moderna: Potential To Get Second Product To Market

2023-07-06 18:20:15 ET

Summary

• Moderna, Inc. has submitted multiple regulatory submission of mRNA-1345 as an RSV vaccine in older adults ages 60 and older; additional regulatory submissions expected in coming months.
• The global respiratory syncytial virus market is expected to reach $4.20 billion by 2027.
• GlaxoSmithKline obtained regulatory approval of its RSV vaccine in adults ages 60 and older known as Arexvy; analysts estimate that it could generate peak sales of $2.5billion.
• Moderna expects six major vaccine launches from its respiratory franchise, with expected annual sales of $8 to $15 billion by 2027.

Moderna, Inc. ( MRNA ) is a good speculative biotech play to look into. The reason why I state that is because it was able to submit regulatory applications for mRNA-1345 to several global health authorities as an RSV vaccine. Such an RSV vaccine is to prevent lower respiratory tract disease [LRTD] in older adults ages 60 and older. Why do I believe that further value can be gained here? That's because it sent the regulatory applications only several health authorities to start off with. It expects to submit additional global regulatory applications of mRNA-1345 as an RSV vaccine in older adults to several other health authorities in the coming months.

Not only would multiple regulatory approvals of mRNA-1345 allow for catalysts, but it would accomplish something even more important, which would be the ability to target a large market. With multiple regulatory submissions of mRNA-1345 as an RSV vaccine in older adults, plus the possibility of it gaining approval for a second product from its pipeline, these are the reasons why I believe that Moderna is a good speculative biotech play to look into.

RSV Vaccine Market Being Targeted Opens Another Avenue Of Revenue Generation

As I stated in the beginning above, Moderna was able to submit regulatory submissions to several global health authorities to possibly obtain approvals of its RSV vaccine candidate mRNA-1345. The initial territories where submissions have been made for this specific vaccine candidate are as follows:

• Switzerland
• European Union
• Australia
• United States.

One thing to note about the United States regulatory submission of mRNA-1345 as an RSV vaccine for adults ages 60 and older, is that it was a rolling Biologics Licensing Application [BLA] submission. A rolling BLA means that Moderna can send parts of its application little by little, instead of having to wait to send the entire application at the end upon completion of it.

RSV stands for " Respiratory syncytial virus " and it is a common respiratory virus that causes mild, cold-like symptoms. It is said that most people recover in a few weeks from it, but it can become serious for certain patients. For instance, in infants and older adults who have a weakened immune systems or ongoing chronic medical conditions. There are several symptoms that RSV patients experience, such as the following:

• Decreased appetite
• Fever
• Wheezing
• Sneezing
• Runny nose
• Cough.

As I said before, I believe that Moderna being able to obtain multiple regulatory approvals of mRNA-1345 as an RSV vaccine could change the value of it. Why is that? It is because of the large global market opportunity possible in targeting this indication. The global respiratory syncytial virus market is expected to reach $4.20 billion by 2027 . This is a large market opportunity to go after and I believe that Moderna could be a huge beneficiary of being able to generate significant revenue from it. Especially, since cases of RSV are starting to rise significantly . It is not going to be an easy market for it to go after though, because it will face a competitor. Therefore, sales that it might obtain might be impacted. It is because GSK plc ( GSK ) aka GlaxoSmithKline received FDA approval of an RSV vaccine in adults ages 60 and older known as Arexvy.

The global market opportunity for such vaccines is expected to rise in the coming years. For instance, one analyst believes that GlaxoSmithKline could obtain $2.5 billion in peak sales of Arexvy . This company has an upper hand over Moderna for now, because Arexvy was the first vaccine to receive FDA approval as an RSV vaccine in older adults. Should Moderna be able to ultimately achieved the same with mRNA-1345 in the United States, it would be the second to do so.

The reason for Moderna being able to file multiple regulatory submissions of mRNA-1345 as an RSV vaccine in adults ages 60 and older was because of a positive interim analysis from the ConqerRSV study , which was a double-blind, placebo-controlled study that recruited a total of 37,000 adults 60 years or older in 22 countries. The primary endpoints were obtained with respect to two definitions of RSV-LRTD [Respiratory Syncytial Virus Lower Respiratory Tract Disease]. They are as follows:

• Two or more symptoms of RSV-LRTD = vaccine efficacy of 83.7%
• Three or more symptoms of RSV-LRTD = vaccine efficacy of 82.4%.

In terms of safety, things weren't that bad either. It was noted that treatment with mRNA-1345 was tolerable and safe for patients to take. Most commonly reported adverse reactions to this vaccine were: Fatigue, injection site pain, myalgia, headache and arthralgia [joint pain]. Where Moderna might be able to benefit further with respect to mRNA-1345 isn't only in targeting this 60 and older adult patient population. It is also exploring this vaccine in a phase 1 study in pediatric patients. Being that this is only in phase 1 testing, this means that such an expansion opportunity of mRNA-1345 won't happen right away. Still, it is nice to see that it is at least working towards expanding the RSV vaccine towards another segment of the RSV market.

Financials

According to the 10-Q SEC Filing , Moderna had $16.3 billion in total assets as of the quarter ending March 31, 2023. This biotech is in great shape, because it is generating sales from its Covid-19 vaccine. In Q1 of 2023, it generated revenues of $1.9 billion.

The reason why I believe that its financial position should be strong in 2023 is because it still reiterates that its minimum sales for this period will be about $5 billion, thanks to previously announced Covid-19 vaccine Advanced Purchase Agreements. Not only that, but there is something else to consider as well, which is that it is expecting to negotiate new orders for its Covid-19 vaccine in the fall of 2023. Such negotiations that are taking place for this period are with the U.S., Japan, and Europe.

One thing to note is that should the RSV vaccine mRNA-1345 be approved, sales won't start until at least 2024. Still, this biotech is excellent to look into, because it is expecting six major vaccine launches from its respiratory franchise, with expected annual sales of $8 to $15 billion by 2027. The vaccine franchise that I'm talking about deals with Covid-19, RSV, Flu, and even possibly combinations thereof.

Risks To Business

There are several risks that investors should be aware of before investing in Moderna. The first risk to consider would be with respect to ongoing Covid-19 vaccine sales. While it will at least obtain the $5 billion from Advanced Purchase Agreements, there is no guarantee that commitments will be made from the other territories with ongoing negotiations for the Covid-19 vaccines.

A second risk to consider would be with respect to the recent regulatory submission of mRNA-1345 as an RSV vaccine for adults ages 60 and older. There is no assurance that the biotech will be able to receive approvals for one or all of the territories where submissions have been made.

A third risk to consider would be with respect to ongoing phase 1 study using mRNA-1345 as an RSV vaccine, which is being developed for pediatric patients. While this vaccine had done well with respect to older adults ages 60 and older, there is no guarantee that it will perform well in the pediatric patient population in the ongoing phase 1 study.

A fourth and final risk to consider would be with respect to Moderna's vaccine expectations. As I stated above, it believes that it could have six major vaccine launches from its respiratory franchise in the coming years. That is, it expects annual sales of between $8 to $15 billion by 2027 from it. However, this is just an estimate and there is no guarantee that it will receive regulatory approvals from several or all of the expected territories. In addition, there is no assurance that it will be able to generate its expected projected revenue.

Conclusion

The final conclusion is that Moderna is a good speculative biotech play to look into. I state that, because it at least still has its Covid-19 vaccine revenues to keep it afloat for awhile. I believe that the $5 billion of Covid-19 vaccine Advanced Purchase Agreements, plus the possibility of negotiating additional territories for fall of 2023, is a huge positive. Even then, I also talked about the potential that the company might be able to achieve if it ultimately receives regulatory approvals of its mRNA-1345 RSV vaccine in adults ages 60 and older. It is a multi-billion-dollar global market opportunity, but again it is not going to be easy. That's because one analyst, as I noted above, expects GlaxoSmithKline to obtain $2.5 billion in peak sales from Arexvy. Thus, it is going to be a competitor that Moderna may have to deal with.

With multiple regulatory submissions of mRNA-1345 as an RSV vaccine in older adults, plus the possibility of it gaining approval for a second product from its pipeline, these are the reasons why I believe that Moderna, Inc. stock is a good speculative biotech play to look into.

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