Wolfe Research Continues to Favor Moderna's (MRNA) 'Significiant Upside Optionality' in its Broad Pipeline
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Wolfe Research analyst Andrew Galler reiterated an Outperform rating and $261.00 price target on Moderna (NASDAQ: MRNA).
The analyst comments "At the time of our initiation in November 2021, the stock was coming off of a onetwo punch from a cut to COVID vaccine guidance and PFE’s topline data for Paxlovid from the EPIC-HR study, but with increasing visibility into the booster opportunity (which has only been helped by the spread of the Omicron variant), the major question became whether MRNA could extend the utility of mRNA therapeutics beyond COVID. From this perspective, we viewed the buy-in as less than for MRNA’s peer BNTX; the mRNA platform has a dependent probability for future programs in the same therapeutic areas and MRNA’s pipeline is more heavily levered to infectious diseases. While seasonal influenza data underwhelmed with immunogenicity inline with licensed vaccines and arguably inferior reactogenicity (which may have just been a function of thorough AE interrogation), the infectious disease pipeline still has a number of readouts over the next 12-18 months where MRNA doesn’t face major incumbents, including RSV and CMV, that should drive the stock higher as the Spikevax franchise becomes less volatile as COVID becomes an endemic disease. There are also a number of “wild card” readouts in 2022 that aren’t priced into the stock today, including the personalized cancer vaccine readouts in melanoma and HPV- HNSCC, potential propionic acidemia that can derisk the broader rare disease platform, and early data for the IL-2 platform. Overall, we see significant upside optionality in MRNA’s broad pipeline with relatively limited downside in the Spikevax franchise from here, and MRNA has significant free cash flows in the near-term that are locked into government orders that should fund MRNA’s planned expansion into new core modalities such as gene editing."
Shares of Moderna closed at $146.54 yesterday.
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