Moderna shares have been on a tear as a rise in Covid-19 cases in the US, and the advent of updated vaccine boosters, have built the case that the company can benefit for longer from selling its shots.
The complexities of the updated boosters, however, pose a challenge. Moderna (ticker: mRNA ) has had to swiftly shift away from an experimental Covid-19 booster it has been touting since the early spring, and investors are wondering how it will keep pace with its chief competitor, Pfizer (PFE).
Although Moderna stock (ticker: mRNA) is down 34.3% this year, it is up 37.3% over the past month, outpacing a rally in its sector that has lifted the SPDR S&P Biotech ETF (XBI) 29.9%. The S&P 500 is up 3.4% over that time frame.
The company’s work in the coming months will be tested against the conventional wisdom on Wall Street that its ability to deliver in commercial terms lags behind that of Pfizer,
which has boasted of a commanding market share in developed economies.
One key will tell whether Moderna is able to extract a higher price for fall doses of its vaccine from the US government than the $30.48 the government paid Pfizer (PFE) in a deal announced at the end of June. “I do think that Moderna is probably holding out,” says Hartaj Singh, an analyst at Oppenheimer. “Moderna’s probably angling for $35 or above.”
Expectations around that fall booster campaign have changed radically in recent weeks. For months, Moderna has been touting an updated version of its Covid-19 vaccine, called mRNA-1273.214, that mixed its original vaccine with a version designed to target the original Omicron variant, BA.1.
The idea was that the updated bivalent booster would offer more protection than another dose of the original vaccine. Moderna placed a major bet on BA. 1 being the correct variant to target as the disease evolves, and in May, CEO Stéphane Bancel told Barron’s that mRNA-1273.214 was the only vaccine his company could make for delivery in August, the month when influenza vaccines are generally distributed each year.
The FDA had other plans. On June 30, the agency asked for bivalent boosters that target the newer BA.4/5 variants, rather than BA. 1, though it said it is aiming for a later rollout, in October, giving manufacturers more time to prepare.
“We don’t actually know what will be important in the fall, and there’s no way to know,” says Dr. Eric Rubin, a member of the FDA’s vaccines advisory committee and the editor in chief of the New England Journal of Medicine. “The FDA is sort of rolling the dice on the idea that it might be a better match.”
Both Pfizer and Moderna had already run human trials with bivalent boosters mixing the original vaccine with a BA. 1-targeted vaccine. Now, they are working to get boosters targeting BA.4/5 ready for the US market.
At the late June FDA meeting, a company executive said Moderna would have a bivalent shot targeting BA.4/5 ready in late October or early November, while on June 11, the company officially announced that booster, calling it mRNA-1273.222. The company’s BA. 1-targeted booster, meanwhile, could end up being sold to other countries.
That could raise questions in the US, given Moderna data showing that the version targeting BA. 1-mRNA. 1273.214—elicited stronger neutralizing antibody responses against BA. 5 than the original vaccine. With B.A. 5 now dominant in the US, and the White House recommending that eligible Americans get boosters, Moderna seems to be sitting on a better vaccine than is available to the public today that the FDA hasn’t authorized.
One possible consideration is that authorizing a BA. 1 vaccine now could kneecap demand for the BA.4/5-specific vaccines, which the FDA thinks will be more protective but won’t be ready until later in the fall. “I suspect that the reason that the FDA didn’t want to authorize the BA. 1 vaccine is to incentivize the production of a BA.4/5 [vaccine],” Rubin says. “Once the company makes the BA. 1 and sells the BA. 1, there won’t be that much interest in producing a [BA.4/5] vaccine.”
The BA.4/5-targeted boosters will still need FDA authorization, though FDA won’t need human trial data on them, relying instead on the data on the BA. 1-targeted boosters. The FDA is asking drugmakers to “expediently” run clinical trials of the BA.4/5-targeted boosters, but the agency’s top vaccines official, Dr. Peter Marks, said in a statement in late June that the agency will consider data gathered in testing the BA. 1-targeted boosters as it weighs whether to authorize the shots for BA.4/5.
“FDA acknowledges that clinical data from studies with vaccines containing BA.4/BA.5 components may not be comprehensively reviewed and verified by FDA, or may not be available at all, prior to their authorization,” an FDA spokesperson, Abby Capobianco, told Barron’s in a statement.
Write to Josh Nathan-Kazis at [email protected]
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