Moderna's Message

One of the market's stranger dynamics in 2022 has been the underperformance of Moderna, one of only two makers of MRNA vaccines for Covid-19. The company is currently working on a new booster shot to address Omicron variants that should be available this fall. And yet the stock is down 27% this year, more than double the S&P 500's loss and far worse than Pfizer's 16% decline. 

The company's stock did have a good Wednesday, though. Shares soared 16% after the company reported better-than-expected quarterly results. Second-quarter sales were $4.7 billion versus analysts' $4.1 billion estimate, Barron's Josh Nathan-Kazis reports.

Shortly after the results, Josh spoke with Moderna CEO Stephane Bancel. Here are highlights from his story: 

Some analysts have argued that Moderna needs to undertake big-time M&A as Covid-19 vaccine demand drops worldwide. Bancel disagrees.

“They want us to create value,” he says of his investors. “So we are very happy when we tell them look, we’re returning cash to shareholders, because in the last quarter we didn’t find anything to do. We don’t want to do a big deal for the sake of doing a big deal.”

Instead, Moderna announced on Wednesday a new $3 billion share buyback, after buying back 9 million shares for $1.3 billion in the second quarter. An additional $1 billion in capacity remains from an earlier share buyback announced in February.

“Why would we, at this stage in the game, want to do something else that looks shiny, when we’re so close to our potentially amazing assets,” Bancel says.

...

In its own earnings presentation last week, Pfizer said that its share of the Covid-19 vaccine market was climbing to 68% in developed markets from 59% at the start of the year. Bancel says he sees his company winning market share from Pfizer as the Covid-19 vaccine shifts toward a commercial market, away from the current model where the U.S. government buys doses for the country.

“ Pfizer has a higher share because it could supply more initially, given the lower dose and the teen indication they got before us,” he says.

Bancel says that Moderna’s booster performs better in real-world trials than Pfizer’s, and that Moderna will win market share once the company can make that case through advertising.

The company can’t advertise its booster until it has full Food and Drug Administration approval; while the primary series of the Moderna vaccine is now fully approved, the booster dose is still available under an emergency use authorization.

“We cannot promote the booster,” Bancel. “You really have a very clear message from a lot of real-world evidence that the Moderna vaccine has better efficacy, provides longer duration of protection. But if you ask in the street… very few people actually feel the vaccines are different…. So I think we have a great opportunity as we go commercial, and we get [full approval] on the boosters, to be able to share those facts with consumers.”

You can read Josh's full story here.