Moderna shaves off $7 billion in value after Pfizer warning

The pandemic officially ended months ago, allowing a weary public to get back to normal living. That was great news for large swathes of the economy.

But not all of it. Moderna Inc., which shot to fame when it became one the first companies to bring the world Covid-19 vaccines, has been searching for its next big thing ever since. Investors have bailed in droves as waning demand for shots and treatments for the virus drove an eight-day losing streak in the stock.

Moderna has erased $6.8 billion in market value this week after rival shotmaker Pfizer Inc. slashed its profit outlook late last Friday, sounding the alarm on dwindling demand for its Covid shots and pills. Moderna’s stock closed at the lowest since November 2020 — that’s when the company was still racing to get its Covid jab authorised for US use.

“Covid-19 vaccine revenue concerns should be at all time high right now,” said Hartaj Singh, an analyst at Oppenheimer. “A good third-quarter print should allay some of these fears. And good guidance early next year on 2024 potential revenues could get the stock’s mojo back.”

As Moderna struggles to position itself beyond its blockbuster Spikevax vaccine, Wall Street has been divided on its fate with half of the 24 analysts tracked by Bloomberg rating it a 'buy'. The other side, including Singh who rates the stock market perform, is less enthusiastic with 10 analysts saying to hold the stock and two recommending selling.

The vaccine maker is striving to prove its messenger-RNA technology will work against other diseases, including cancer. A flu and Covid combo shot as well as an RSV vaccine are also in the works.

Massive fall from peak

Moderna’s stock has plunged roughly 83 per cent from its August 2021 peak when its market capitalisation was nearly $200 billion. Shares have wilted as optimism waned for future Covid sales and investors pivoted to stocks related to the new class of weight-loss drugs — known as GLP-1s. Moderna — which once drew comparisons to Tesla Inc. — is one of the worst-performing S&P 500 names so far this year.

Following Pfizer’s update, Moderna management has since affirmed its guidance for vaccine sales for the full year. Management still expects between $6 billion to $8 billion from the Covid shots, while cautioning that it is still too early to predict US vaccination rates.

William Blair analyst Myles Minter sees Moderna’s US Covid sales at the lower end of guidance range based on updated guidance and demand commentary from Pfizer.

For its part, Pfizer initially recovered after its announcement, gaining 3.6 per cent on Monday as the drugmaker’s post-pandemic growth strategy was weighed and investors expectations were reset, according to some on Wall Street. Similar to Moderna, Pfizer’s stock has languished, losing about half its value from its pandemic record high.