Moderna (MRNA) set to cure COVID-19 – is now the time to invest?

MRNA’s key COVID-19 developments so far

  • US government is willing to fund mRNA-173 through every trial until regulatory approval.
  • Biomedical Advanced Research and Development Authority (BARDA) is ready to give Moderna (NASDAQ: MRNA) $483 million to expedite mRNA-173 through clinical development.
  • Lonza Group, via its agreement with Moderna, is manufacturing mRNA-173 at their US and Switzerland operations.
  • Moderna is currently in phase 1 clinical trials. The National Institute of Health selected 45 healthy patients to use mRNA-173.
  • MRNA is likely to enter phase 2 in the coming weeks. Positive results from phase one should act as the stepping stone to a phase 2 trial.
  • If there are no hiccups, phase 3 trials are expected to begin in Autumn.

Is Moderna worth the investment?

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

The two biggest enemies in the COVID-19 vaccine race are time and money.

It requires a large capital outlay to fund a COVID-19 vaccine development. The US government’s initiative to fund mRNA until the end of the clinical timeline reassures investors. Also, BARDA’s investment of $483 million means Moderna is funded even without federal funding. BARDA’s funding will also allow MRNA to service the increased manufacturing needed to solve the crisis. Thus, for Moderna money is not a problem.

Now onto the second enemy in the COVID-19 race, time. Moderna is steaming through the clinical process. With phase 1 virtually under their belt, phase 2 should commence in the coming weeks. If Moderna’s phase 1 announcement is anything to go off, then phase 2 should trigger a buying frenzy. Also, Moderna was the first company to commence human trials.

Furthermore, if MRNA achieves positive results in phase 3, then manufacturing (Lonza) can begin immediately. Thus, on a comparative level, Moderna is winning the time and funding race. Ultimately, explaining the extreme investor backing.

I would strongly argue Moderna is worth the investment. (Opinion not advice and I do not own shares). However, anyone looking to invest in Moderna must first understand the risks.

The risks involved in the vaccine/treatment game

Moderna (MRNA) is not the first US biotech to catch the eye of COVID-19 opportunists. Over the past few months, we have covered the most promising biotechs involved in the Trillion dollar race to stop COVID-19 in its tracks. The common theme recurring with the stocks is that they remain relevant for a few weeks at a time before investors flee elsewhere.

Furthermore, the FDA arguably has a more substantial market influence than any internal business earnings released this month. We see this influence in the Moderna case. The stock is already likely to open 12% higher today as the FDA phase 2 trial approval is ringing bells on Wallstreet. The stock is expected to lose traction in the following weeks until further news is released. But for now, expect a bullish run as investors attempt to cash in on another announcement of a FDA approval. The risks are apparent, but the reward for such risk remains a mystery.

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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by Patrick McLoughlin, and Tyger Fitzpatrick, Senior Manager of YIG, and Founder.

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