Moderna (MRNA) is doubling down on its efforts in cancer treatment with Merck (MRK). But Moderna stock hit its peak in mid-2021 and has fallen ever since.
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The companies are testing their cancer vaccine in combination with Merck’s Keytruda in patients with melanoma. In a recent update, the combination lowered the likelihood patients’ cancer would spread or lead to death by 65% compared to Keytruda alone.
Moderna and Merck are testing the vaccine in relatively healthy patients — increasing the potential for success. The patients had their melanoma surgically removed and hadn’t undergone earlier treatment. The companies plan to start a final-phase study this year and rapidly expand to other cancers.
Recently, Moderna unveiled early results of its study in propionic acidemia, a rare disease in which the body can’t break down certain proteins and fats. There have been no dose-limiting side effects and the treatment appears tolerable. That’s important as Moderna is testing the drug in children.
Moderna is also working on a vaccine to prevent respiratory syncytial virus, or RSV, in older adults. In general, RSV causes cold-like symptoms. But it can be serious or deadly in older adults and newborns. If approved, Moderna could launch its vaccine around the same time as Pfizer (PFE) and GSK (GSK). The latter two have already gained U.S. approval.
But Moderna sales and profit declined in 2022, and analysts expect that to happen again this year as demand for Covid vaccines declines. The Food and Drug Administration recently said drugmakers should update their Covid vaccines to tackle the dominant XBB.1.5 subvariant.
So, all in all, is Moderna stock a buy or a sell today?
A Fundamental Look At Moderna Stock
Moderna’s first-quarter metrics beat expectations, though tumbled on a year-over-year basis. Earnings came in at 19 cents per share, vs. projections for a $1.75 per-share loss. Profit tumbled 98%. Sales also fell 69% to $1.86 billion, but topped calls for $1.18 billion.
Analysts continue to expect steep declines for Moderna as Covid vaccinations and boosters wane.
For the second quarter, they project a per-share loss of $3.97 and more than $346 million in sales. Profit would turn around from a year-earlier gain of $5.24 per share and sales would plunge 93%.
Moderna expects just $200 million to $300 million for the current period.
Moderna stock has an IBD Composite Rating of 18 out of a best-possible 99. The Composite Rating is a measure of a stock’s key fundamental and technical measures. So, MRNA stock ranks in the lowest one-fifth of all stocks on that measurement.
What Do Annual Metrics Say?
Moderna stock went public at 23 in late 2018. In 2020, shares rocketed more than 434%. The gain was less bullish in 2021, with shares rising 143%. In 2022, shares toppled 29%.
Sales eked out a narrow 4% gain last year, coming in at $19.26 billion. That just beat forecasts for $19.13 billion, according to FactSet. Moderna had forecast $18 billion to $19 billion in sales. But earnings plunged 29% to $20.12 per share.
The market for Covid boosters is uncertain. The updated bivalent booster shots from Pfizer and Moderna block the BA.4 and BA.5 strains of omicron as well as the original virus. But those strains don’t account for any cases in the U.S. today. A variant called XBB.1.5 is now dominant in the country. The companies are now working to update their vaccines for the fall.
Demand for boosters has also waned. Just 17% of people six months of age and older have gotten one of the updated bivalent boosters from Moderna or Pfizer.
MRNA stock analysts expect sales to crash 63% to less than $7.2 billion in 2023. That includes projections for $6.63 billion from the Covid vaccine. But Moderna predicts just $5 billion in sales of the Covid shot, based on already signed agreements.
Moderna Stock: Technical Analysis
Moderna stock isn’t currently forming a chart pattern, according to MarketSmith.com. Shares are trading below their 50-day and 200-day lines.
MRNA stock has an IBD Relative Strength Rating of 14. The RS Rating is a 1-99 measure of a stock’s 12-month performance. This means Moderna stock ranks below the bottom fifth of all stocks on that metric.
But MRNA stock has a poor EPS Rating of 7, reflecting recent losses.
Keep tabs on IBD Digital for more on stock ratings.
What’s After Covid Shots?
Investors are paying close attention to the bespoke cancer vaccine in partnership with Merck. The shot prompts an immune response against a patient’s own tumor cells.
The cancer vaccine reduced the likelihood for cancer to spread or lead to death in melanoma patients by 65% vs. Keytruda alone. Keytruda is the standard treatment in melanoma following surgery. Now, the companies plan to begin a final-phase study later this year.
Moderna and Merck are also planning to test their cancer vaccine in other cancers, including a common form of lung cancer.
Beyond cancer, Moderna also has a breakthrough designation for its RSV shot. In older adults, the shot proved almost 84% effective against mild disease and more than 82% effective against severe RSV.
The FDA has already signed off on RSV vaccines from GSK and Pfizer. Moderna is planning to ask the FDA to approve its RSV shot in the first half of this year. That puts the trio on deck to compete for the RSV vaccination market in the U.S. this fall.
Recently, Moderna unveiled the results of a potential treatment for propionic acidemia, a rare, genetic condition in which the body can’t break down certain proteins and fats. After a year of treatment, most patients had none or a lower rate of metabolic decompensation associated with the disease. Metabolic decompensation is a series of symptoms that includes vomiting and food refusal.
So, Is Moderna Stock A Buy Or A Sell Right Now?
No, Moderna stock isn’t a buy right now. Moderna stock is trading below its key moving averages. Further, shares aren’t forming a clear entry for investors. By at least one measure, Moderna stock was a sell when it tumbled below its 50-day line on April 17. That’s a bearish sign.
The company’s once eye-popping sales and profits are expected to decline this year and next. Analysts don’t expect a return to massive pandemic-era growth until 2027. That year, they expect strong sales of Moderna’s personalized cancer vaccine as well as vaccines blocking HIV and the seasonal flu.
To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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