It’s been a complicated day for Moderna Inc. as the company reported its first-ever profit and its first-ever billion dollars in sales amidst an unprecedented move by the Biden administration to support waiving patent rights for COVID-19 vaccines.
Shares of Moderna
tumbled about 10.0% in trading on Thursday morning before bouncing back to be down 1.1% by Thursday afternoon. Its stock closed Wednesday at $162.84, compared with a closing price of $173.59 on Tuesday, most likely driven down by the Biden administration’s decision on Wednesday.
But Moderna CEO Stéphane Bancel took aim at the rationale behind the proposal, noting that the company already said Oct. 8 it does not plan to enforce its COVID-19 vaccine patents and, more importantly, there is “no idle mRNA manufacturing capacity in the world” to step in and manufacture extra doses of mRNA vaccines, according to a FactSet transcript of the earnings call.
“Whoever wants to do mRNA vaccines will have to buy the machine, invent the manufacturing process, invent purification of processes, and then to go processes, and then they would have to go run the clinical trial, get the data, get the product approved, and scale the manufacturing,” Bancel said. “This doesn’t happen in 6 or 12 or 18 months.”
SVB Leerink’s Mani Foroohar told investors he agrees with Bancel’s assessment, that patents aren’t the key to a vaccine’s value, it’s the ability and knowledge to make mRNA vaccines.
“We see manufacturing know-how, access to raw materials, and in-country data that can be used to pursue regulatory approvals as the key stores of value in any vaccine franchises,” Foroohar wrote. “The current debate glosses over these issues (in this regard, we are in agreement with MRNA management).”
BioNTech and Pfizer also saw their stocks tumble Wednesday afternoon and into Thursday’s premarket trading.
Moderna’s earnings recap:
Moderna said Thursday it had earnings of $1.2 billion, or $2.84 per share, in the first quarter of 2021. This is compared to a loss of $124 million, or 35 cents per share, in the first quarter a year ago, back when Moderna was a preclinical underdog that had not yet shared data from the Phase 1 clinical trial for its COVID-19 vaccine.
The company reported $1.9 billion in sales for the quarter, including $1.7 billion in COVID-10 vaccine sales. Though its revenue missed the FactSet consensus, which was $2.0 billion, the quarter marked a milestone, in that it was Moderna’s first-ever billion-dollar sales quarter. (The company had $199.8 million in revenue for its COVID-19 vaccine in the fourth quarter of 2020, which is when its vaccine began receiving authorizations in nations around the world, including in the U.S.)
Pfizer’s COVID-19 vaccine, which had similar efficacy rates in clinical trials to Moderna’s, in comparison, brought in $3.4 billion in revenue in the first quarter.
Other key points from Moderna’s earnings report:
• Initial data from the study evaluating its COVID-19 vaccine in teenagers between the ages of 12 and 17 years old showed an efficacy rate of 96%, with no serious safety concerns. The Phase 2/3 clinical trial is testing the company’s COVID-19 vaccine in 3,235 teens who have received at least one shot in the two-dose regimen and have not previously been infected with SARS-CoV-2.
• The company shipped 102 million doses of its vaccine in the first quarter and plans to supply a total of 800 million doses in 2021, with advanced purchase agreements of $19.2 billion. Bancel told investors that he believes it’s an “mRNA market” for COVID-19 vaccines. “There is a big shift versus what the market perceived 6 or 9 or 12 months ago when protein vaccine or adeno vaccines were thought to be the answers to the pandemic,” he said.
Moderna’s stock is up 55.8% for the year, while the S&P 500
has gained 10.9%.