This Stock Has Already Doubled This Year and Is Still Racing Towards a Major Catalyst

Moderna (MRNA 10.52%) has been on fire this year. As of this writing, the company's shares have slightly more than doubled to date. What's more, the biotech has an important catalyst on the horizon. Let's find out whether there is any upside left for the company.

Image source: Getty Images.

Racing toward an approval

Moderna has been working on an influenza vaccine, mRNA-1010. It submitted regulatory applications for this candidate earlier this year. The U.S. Food and Drug Administration (FDA) should approve or reject Moderna's application by Aug. 5. It's an important date for the biotech company, as an approval in this field might allow it to establish itself as a leader in the flu market. True, plenty of flu vaccines exist, but their efficacy is usually not very impressive, typically between 40% to 60% in the U.S. In phase 3 studies, mRNA-1010 performed better than approved vaccines in patients aged 50 and older who tend to be more at risk of severe cases of the disease, hospitalization, and death.

And if there was any doubt about whether mRNA-1010 would get the FDA's green light, recent developments have made that outcome practically certain. Members of an advisory committee convened by the FDA to give their opinion on whether mRNA-1010 should earn approval unanimously voted in favor. The health regulatory agency doesn't always follow the advice of these experts, but it almost always does. It would be surprising if mRNA-1010 doesn't get the nod.

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NASDAQ: MRNA

Moderna

Today's Change

(-10.52%) $-8.05

Current Price

$68.51

Key Data Points

Market Cap

$30BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Market cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$68.00 - $76.87

52wk Range

$22.28 - $85.60

Volume

152.4K

Avg Vol

7.8M

Gross Margin

11.55%

What does this mean for the stock?

Moderna's shares soared after the advisory committee's vote of confidence for mRNA-1010. So, it's likely the market has already priced in a positive outcome, and the stock won't move much once mRNA-1010 is approved. However, there are still good reasons to invest in Moderna. The company is once again demonstrating its innovative qualities with mRNA-1010, just as it did with its coronavirus vaccine, which became a leader in that niche. The flu vaccine market isn't that large. According to some estimates, it was worth $8.9 billion last year, although it will continue growing at a good clip for the foreseeable future. Moderna's potential sales in this niche alone do not justify its $24.5 billion market cap, especially given that it generates meager revenue from its currently approved products.

That said, the vaccine maker has a rich pipeline with several products that could become key growth drivers. For instance, Moderna is developing mRNA-4157, an investigational personalized cancer vaccine that has shown highly encouraging clinical trial results and is now undergoing several phase 2 and phase 3 studies. Moderna is also going after difficult targets. The company is developing an HIV vaccine. Moderna's success in the flu vaccine market will help it pursue even more lucrative markets. Over the next five years, the company could have a much broader portfolio of approved products while generating strong revenue and earnings. That's why Moderna's shares are still attractive, even after climbing by about 100% this year.