To The Moon

After years of lackluster performance, $Moderna, Inc.(MRNA)$ share price posted double-digit gains in January this year. The biotech firm, which rose to fame during the pandemic for its mRNA technology and the rapid development of a COVID-19 vaccine, has in recent years been hamstrung by two of its core pillars: the U.S. government terminated approximately $500 million in funding for mRNA vaccine development last year, while plummeting demand for its COVID-19 vaccine has left revenues a far cry from their peak levels.

The company’s recent developments have been a mixed bag: its respiratory syncytial virus (RSV) vaccine was approved for commercial use in 2024, yet its cytomegalovirus (CMV) vaccine candidate failed in Phase III clinical trials just a few months ago. For investors considering a stake in Moderna, the following key details warrant close attention.

In its corporate journey, the biotech giant now stands at a pivotal turning point. Moderna is striving to build out a seasonal vaccine business line to fund research and development (R&D) for a broader pipeline spanning oncology and rare diseases. To date, the company has two COVID-19 vaccines and one RSV vaccine on the market, and it plans to expand its seasonal product portfolio with an influenza vaccine. Earlier this month, the U.S. Food and Drug Administration (FDA) declined to accept its influenza vaccine candidate application over vaccine dosage issues in the study’s control group, but it has since reversed course and initiated the review process after Moderna submitted a revised regulatory plan. If the process proceeds smoothly, the vaccine is expected to launch ahead of the next flu season.

In its outlook released earlier this year, Moderna projected that growth in seasonal vaccine sales will drive the company to achieve cash flow breakeven by 2028. The firm recently reaffirmed its forecast of 10% revenue growth for the year. Meanwhile, its R&D pipeline continues to advance, including an oncology vaccine candidate currently in Phase III clinical trials.

While the FDA’s temporary rejection of its influenza vaccine application a few weeks ago posed a setback, the issue was resolved quickly. The stringent regulatory landscape means the biotech may still face near-term challenges, yet its long-term prospects remain promising thanks to a robust pipeline with multiple late-stage drug candidates. This likely means Moderna’s share price will not skyrocket overnight, but it is nonetheless a solid pick for patient investors seeking biotech companies with sustainable growth potential.

Notably, Philippe Laffont, billionaire founder of Coatue Management, recently took a position in Moderna, purchasing 200,000 shares. The hedge fund, which manages $39 billion in 13F securities, counts four major tech stocks as its top holdings, with Taiwan Semiconductor Manufacturing Company (TSMC) leading the pack at over a 6.5% allocation. Although the Moderna trade accounts for a mere 0.01% of its portfolio, the move by the investor, renowned for spotting tech sector winners, has nonetheless drawn significant market attention.

Moderna’s share price soared in the early stages of the pandemic on the back of its COVID-19 vaccine launch, but it has tumbled more than 70% over the past three years as vaccine demand waned. Today, through cost control and strategic transformation, the company is refocusing on long-term growth: leveraging its existing business of COVID-19 and RSV vaccines, it plans to expand its respiratory product line with an influenza vaccine, using revenues from this segment to fund R&D in oncology and rare diseases. Currently, several oncology candidates in its pipeline have entered Phase III trials, with numerous other investigational drugs making steady progress.

Analysts believe that while Laffont has not publicly disclosed his rationale for the position, he clearly recognizes Moderna’s innovative capabilities as an mRNA technology platform and is bullish on its potential to kick off a new growth cycle. The investor, who has reaped substantial returns from his investment in CoreWeave, is seemingly on the hunt for new growth opportunities.

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