Moderna (MRNA) stock rose 15% yesterday and today in the pre-market it is 5% up. It has become known that starting from July, 20 Moderna will be included in the Nasdaq 100 index.
On July 13, Moderna Inc (NASDAQ: MRNA) stock rocketed higher after a bullish analyst discussion and news about the biotech company. Jefferies analyst Michael Yee said that the stock can still surge further. It is believed that the latest surge came after reports emerged that Moderna would be added to a popular stock market index – Nasdaq 100 (INDEXNASDAQ: NDX).
Nasdaq confirmed that it will add Moderna to the index before the market opens for trading on July 20. Notably, the index has the 100 biggest non-financial firms that are listed on the Nasdaq Stock Market according to their market capitalization.
The shares shot up 9.3% in the morning session on Monday meaning that the stock is up 239% so far in 2020. This biotech firm does not have any approved drugs but has a market capitalization of over $26 billion. Moderna stock is surging amid investor optimism over the firm’s investigational COVID-19 vaccine candidate.
Yesterday, Moderna stock closed at $71.78 (+14.65%). Today in the pre-market, it is another 5% up, at $75.68.
Nasdaq announced that it will replace CoStar Group Inc in the Nasdaq 100 with Moderna due to reclassification according to industry classification benchmark. CoStar offers commercial real estate analytics and information and its shares fell 1.2%.
Force Behind Moderna (MRNA) Stock Surge
The biggest story that is moving the company’s stock is its COVID-19 vaccine. Reports of the development of the vaccine have turned what was earlier controversial biotech into a household brand. The company said that it is almost starting Phase 3 trials of the vaccine. Yee is convinced that it could soon become a blockbuster for the company.
If everything goes according to plan, the Food and Drug Administration (FDA) may issue the vaccine an emergency use authorization by early 2021. Yee initiated coverage of the Moderna stock with a Buy rating, He set a price target of $90 and the stock followed these bullish comments trading at $66.37, up 6% on July 13.
13 of the 14 analysts tracked by FactSet with ratings on Moderna rate it as a Buy while one rates it as a Hold. Yee estimates $2 billion in sales of the company’s vaccine in the first year it hits the market.
If the vaccine succeeds, it might validate Moderna’s huge pipeline of messenger RNA-based drugs. These drugs rely on a similarly unproven technology as that used in the manufacture of the COVID-19 vaccine.
In the past week, Moderna shares plunged on reports that there were disagreements with government scientists. These disagreements were allegedly delaying the start of the Phase 3 trial of the company’s COVID-19 vaccine. The reported mishaps could result in potential risks for many biotech companies. Companies with no marketed products in the late stages of the vaccine race will be the most affected.
That may prove quite out of their depth in the fight and scramble for regulatory approval. At that time, Moderna said that most of its workers had decades of experience in the sector. The company added that they had run Phase 3 programs at ‘top five vaccine companies’. If the vaccine fails or performs below expectations, the stock could be ‘hit hard.’ But Yee said that he:
“believes the stock could appreciate 25% to 50% over the next six to 12 months.”
The next steps for Moderna comprise of publication of the full data from the Phase 1 study of the Covid-19 vaccine. The publication is expected this July. Also, the start of the big Phase 3 study is expected to happen this month.
President Trump’s administration has chosen four potential vaccines as the most likely candidates but the list could grow. The vaccines from Johnson & Johnson (NYSE: JNJ) and Moderna biotech firm are on that list.
These companies will start human trials for potential vaccines by the end of July. That is a record-breaking time to develop a vaccine. However, scientists say that there is no assurance that these vaccines will be effective.
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