Moderna (MRNA -1.39%) has announced its share of good news in the past couple of months. The biotech company generated positive results in the phase 3 trial of its investigational coronavirus vaccine. Then, the U.S. Food and Drug Administration granted the product Emergency Use Authorization in the weeks that followed. Moderna also has signed advance purchase agreements for 2021 that represent more than $11 billion in revenue. That's a big deal for a company that didn't have product revenue just a few months ago.
All of that sounds promising. But there's a bit of news that's even better. It means Moderna's vaccine is feasible for long-term use. Ready to find out more? Read on.
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One big unknown
One big unknown regarding all of the vaccines in development has been the duration of protection against coronavirus. In the cases of Moderna and rivals such as Pfizer (PFE -0.12%) and Novavax (NVAX), measures of neutralizing antibody levels have been strong weeks after immunization. These are the antibodies known for blocking infection. But it's been too early to tell whether these antibody levels would remain strong for at least a year.
If the antibody levels drop significantly, vaccine efficacy also declines. And if these antibodies disappear completely, the body is left defenseless. Here's a possibility researchers have been dreading: a vaccine resulting in strong antibody response only for a month or two. That would mean each person would have to be vaccinated several times a year.
In December, Moderna provided optimistic news in a letter to the editor published in The New England Journal of Medicine. The company examined neutralizing antibody levels in 34 phase 1 participants three months after receiving the second dose of vaccine. While levels declined slightly, as expected, they remained high, the company reported. And they remained higher than those of recovering coronavirus patients.
Even better news came earlier this month. Moderna's CEO Stephane Bancel said the vaccine might offer protection for "a couple of years." This lifts that major unknown of how long antibodies will last.
Moderna only began clinical trials back in March. So, it's impossible for the company to draw this conclusion from 12 months or more of trial data. But Bancel explains the idea by saying "antibody decay" in humans vaccinated with the Moderna vaccine has been slow.
A booster shot
Of course, this applies only to the Moderna vaccine. The duration of Pfizer and BioNTech's vaccine or rival vaccine candidates is still unclear. So, this news sets Moderna ahead of the rest concerning a very important element of the vaccination question. Moderna hasn't yet recommended how often people should receive its vaccine. But the company is planning to test the possibility of a booster given one year after a person's two-dose vaccination. That study will begin in July.
Moderna's plan for a booster shot a year after initial vaccination -- or even a full two-dose vaccination annually -- are ideal scenarios. Here are the advantages: These allow Moderna enough time to manufacture and deliver doses. And more people can be protected with a certain number of doses if vaccination is done yearly rather than every few months.
An annual vaccine also means healthcare systems have enough time to organize vaccinations. And people will be more likely to go for their vaccinations; most wouldn't follow through on getting vaccinated every couple of months over the long term.
What does all of this mean for investors?
This news removes a significant element of uncertainty. If Moderna's vaccine only worked for a couple of months, it would have been disastrous for the company and its stock price -- especially if a rival vaccine maker produced longer-lasting immunity.
That said, Moderna still is a risky investment. For now, the biotech company's revenue and share performance depend on the coronavirus vaccine (its only commercialized product.) If something goes wrong, the shares could take a serious tumble.
But Moderna isn't as risky as it was last year -- when the coronavirus vaccine program was in its early stages and its mRNA technology had not yet been validated. It's passed the hurdles of clinical trials, emergency authorization, and now vaccine duration. All of this is good news, establishing Moderna as a solid player in the coronavirus vaccine market. And that means Moderna stock, which gained more than 400% last year, may be on its way to a second winning year.
