Is Moderna Inc. a good stock to buy now? Have a look at this comprehensive review to find out

Moderna Inc. (MRNA) recently announced that it will submit an application to the United States Food and Drug Administration (FDA) for getting emergency approval for its Covid-19 vaccine. The application, which it plans to submit on Monday, is based on complete results from a late-stage trial of its vaccine., which is 94.1 percent effective in preventing the virus.

Shares of the Massachusetts-based biotechnology company skyrocketed more than 20 percent this morning and hit a new 52-week high of $153.87 following the announcement.

The company also said that its vaccine is 100 percent effective in preventing serious cases. Moderna is expected to become the second company to receive emergency use authorization from FDA this year. On the other hand, drugmaker Pfizer (PFE) and its German partner BioNTech have already submitted their application to the FDA for emergency use of their Covid-19 vaccine, which achieved 95 percent efficacy in phase-3 trials.

Moderna also plans to seek approval from the European Medicines Agency (EMA), which has already started a rolling review of the vaccine. The latest efficacy percentage of the vaccine is slightly lower than 94.5 percent disclosed earlier this month. However, those results were based on the initial data from the study.

The FDA earlier set a benchmark of 50 percent efficacy for approval of covid-19 vaccines. Comparatively, both Moderna and Pfizer have achieved far greater efficacy percentage that makes the approval of the vaccines very likely.

Growing optimism

Businesses and common people around the world have expressed happiness on the announcements made by the aforesaid companies. They are hoping the pandemic will come to an end after vaccines are made widely available. Covid-19 has severely hit economies around the world, besides claiming more than 1.40 million lives globally.

FDA’s independent advisors are slated to meet on December 17 to review the phase-3 study data of Moderna and give recommendations to the drug regulatory authority. On the other hand, the advisors will make recommendations for Pfizer vaccine after discussing its results on December 10, which means Pfizer is one week ahead of Moderna.

Moderna plans to ship its vaccine throughout the country after gaining emergency use approval. When it comes to distribution, Moderna has a clear advantage over Pfizer, as its vaccine can be stored at normal refrigeration temperature. Comparatively, Pfizer’s vaccine needs to be stored at ultra-cold temperature, making it difficult to ship to the distant areas.

Moderna-U.K. supply deal

The United Kingdom has recently inked another deal with Moderna for securing two million additional doses of its Covid-19 vaccine, besides the agreement for 5 million doses it inked a couple of weeks ago. With the latest deal, Moderna will now supply 7 million doses of its new vaccine after getting approval.

Britain has made supply contracts with seven other drugmakers. Overall, it has secured 357 million doses of the Covid-19 vaccines from different developers, including 40 million from Pfizer and 100 million from AstraZeneca PLC. The U.K. is expected to start receiving the deliveries from spring 2021.

Why Moderna stock is a better buy right now?

So far, three pharmaceutical companies are expected to win regulatory approvals for their Covid-19 vaccines including Pfizer, Moderna, and AstraZeneca. Both Pfizer and AstraZeneca have developed their vaccine with the help of their partners.

Pfizer has developed its drug candidate, named BNT162b2, with the help of its partner BioNTech. Ultimately, the two companies will have to share any profit generated from the sale of BNT162b2. The same thing goes for AstraZeneca, which has developed its vaccine candidate AZD1222 with the help of the University of Oxford. The two companies have not revealed any financial details regarding how they are going to split the revenue. But shared profit certainly results in slower growth.

On the other hand, Moderna has full ownership of its Covid-19 vaccine and does not need to share any potential revenue. So, clearly it is expected to be more profitable than rival pharmaceutical companies.  

Moderna stock performance

Moderna stock started the year at a price of around $18 per share. However, the stock has been continuously surging since then, mainly on its Covid-19 vaccine development news. Overall, Moderna’s share price has skyrocketed more than 680 percent on a year-to-date basis that has made it a top pick among investors. The stock closed at $152.74 in the last trading session on a massive volume of 71 million shares, versus the daily average volume of 11.33 million shares.