Moderna, Inc. MRNA shares have rallied since the start of July, rendering the valuation unattractive and "ridiculous," according to a BofA Securities analyst.
The Moderna Analyst: Geoff Meacham maintained an Underperform rating on Moderna with a $115 price target.
The Moderna Thesis: At a roughly $200-billion market value, Moderna has eclipsed pharma industry veterans Merck & Co., Inc. MRK, Bristol-Myers Squibb Company BMY and Amgen, Inc. AMGN, Meacham said in a Tuesday note.
The latter three companies, the analyst said, are therapeutics businesses with proven long-term track records and deep/ diversified late-stage pipelines.
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To justify Moderna's $200-billion valuation, the company needs to sell 1.5 billion doses of COVID-19 vaccine each year from 2022 through 2038, and its entire pipeline must succeed with aggregate peak sales of $30 billion, Meacham said.
"These assumptions are, in our view, impossible to justify," the analyst said.
A $485 fair value for the share would require cumulative COVID-19 vaccine sales of $340 billion through 2038, contributing $280 per share, and a pipeline value of $170 per share, which represents a 100% success rate for four Phase 2 programs, 10 Phase 1 programs and 8 preclinical programs, he said.
Feedback from infectious disease experts, Meacham said, provides support for a skeptical longer-term view of COVID-19 vaccines, even with the emergence of variants like delta.
MRNA Price Action: At last check, Moderna shares were down 5.69% to $456.88.
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