Modern (NASDAQ: ARNM) took center stage when it launched its coronavirus vaccine about a year and a half ago. He then vaccinated a large part of the world’s population. However, investor attention has since shifted away from this biotech company. But Moderna may be on its way back into the limelight.
This is because Moderna is preparing a booster candidate to address the omicron variant. And he aims to bring this potential product to market for the fall vaccination campaign. But before Moderna gets closer to its goal, let’s look at a green flag for the company’s fall vaccination plan — and a red flag.
The green flag: a booster that works
Moderna recently reported that its booster candidate offers “superior” performance over the omicron variant. The vaccine increased a measure of neutralizing antibody activity eightfold one month after vaccination, according to trial data. This means the booster candidate handles the omicron variant even better than Moderna’s coronavirus vaccine. And the candidate also protects against the original coronavirus. Moderna has stated that this potential product is also effective against the omicron BA.4 and BA.5 subvariants.
The biotech company submits the data to the US Food and Drug Administration (FDA) for review. An FDA advisory committee is due to meet June 28 to discuss whether to update current vaccines for the fall to target new strains — or just stick with those original vaccines. Strong data from Moderna could weigh in favor of an update. This would be great news for the company. This is because Moderna seems to be the closest to the finish line compared to its rivals. Pfizeralso, is working on an updated plan – but the major pharmaceutical player has not yet published any data.
The red flag: a sign of weakness
The red flag concerns the performance of the booster candidate compared to the BA.4 and BA.5 sub-variants. Yes, the candidate offers protection. But the performance is not as strong as when it comes to the main variant of omicron. Moderna’s study showed that a measure of neutralizing antibody levels was three times lower against subvariants – that’s compared to performance against omicron.
Thus, the candidate is always efficient. But this weakness is something to watch out for for two reasons. First, it could be a problem if a rival – such as Pfizer – produces a candidate with better performance compared to sub-variants. This could lead this rival to take market share. Second, it could be a problem if other sub-variants emerge – and the booster candidate’s performance weakens further.
What does this mean for Moderna and investors?
Right now I would follow the green flag instead of the red. Moderna’s booster candidate data, on the whole, looks solid. It’s not too surprising that performance weakens against a sub-variant. Changes in the structure of the virus are why companies need to be prepared to update vaccines at some point.
It is important for investors to follow the evolution of the sub-variants – and the performance of the booster against them. If Moderna is able to quickly update boosters as needed, a drop in booster effectiveness won’t be a major issue. But if the business falls behind, demand will suffer. And that could potentially affect revenue.
So far, however, the vaccine picture looks bright for Moderna. The company-approved coronavirus vaccine is resistant to the original virus and variants. And if the FDA approves the idea of updating vaccines, Moderna could be on the verge of dominate the market this autumn.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.