Moderna Inc MRNA shares, which shed over 13% Tuesday on an analyst downgrade, are reversing course — with a competitor's clinical woes as the catalyst.
The Moderna Analyst: SVB Leerink analyst Mani Foroohar has a Neutral rating on Moderna with a $41 price target.
The Moderna Takeaways: AstraZeneca plc's AZN clinical hold reflects reasonable caution given the high safety bar for a vaccine that is being developed for potential administration to many millions of healthy individuals, Foroohar said in a Wednesday note.
Yet the read-through is limited for mRNA or protein subunuit vaccine candidates given the key differences in delivery vectors and underlying technology, the analyst said.
The common cause for concern for all vaccine developers may be the extent to which this event leads to broader vaccine hesitance among the general population or greater regulatory scrutiny across mechanisms of action, he said.
Moderna shares will likely trade up in reaction to reduced competition to become second-to-market after the Pfizer Inc. PFE/BioNTech SE – ADR BNTX combine, Foroohar said.
Given that clinical holds in such large diverse populations are not uncommon, the delay could prove temporary, the analyst said.
If so, Moderna will be in for increased competition from AstraZeneca and Pfizer/BioNTech, he said.
"For now, vigilance and careful review of clinical trial data is the order of the day across all SARS-CoV-2 vaccine programs."
Moderna confirmed that it expects no impact from the AstraZeneca/Oxford adverse event on the COVE study, Foroohar said.
The analyst said he expects that Pfizer/BioNTech and Moderna will be the first two vaccines available under emergency use authorization.
MRNA Price Action: Moderna shares were trading 5.02% higher to $57.07 ahead of the close Wednesday.
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