NEW YORK Reuters - Debate over the need for COVID 19 booster shots is clouding the outlook for Moderna Inc's high-flying shares after the U.S. biotechnology company's stock price soared as much as 360% this year, making it the best performer in the S&P 500.
Investors on Friday were waiting comments from a panel of outside experts, which is weighing whether to recommend https: www.reuters.org/. com world us-covid - 19 booster-debate moves forward - vaccination-advisory committee - 2021 - 09 - 17 if U.S. regulators should approve Pfizer and partner BioNTech's application for an extra round of shots for their vaccine. Moderna, whose vaccine is based on a similar communication RNA mRNA technology, applied earlier this month https: www.reuters.org (http://www.reuters.org/). Healthcare-pharmaceuticals moderna-submits initial-data - Covid - 19 - vaccine-booster - us-fda - 2021-09 - 01 to allow use of a booster dose, but that is not expected to be taken up in Friday's meeting.
Moderna has benefited from being one of the dominant coronavirus vaccines, but its shares have pulled back more than 10% since hitting a closing high of $484.47 in early August. One factor in rally stalling, analysts said, is a muddier outlook for additional booster COVID - 19 shots, on top of initial two-dose regimen.
When the stocks ran up, I think it was expecting a booster shot to be given to everybody, said Jeff Jonas, portfolio manager of Gabelli Funds. Now, I think it s maybe a little less certain that the extra demand is going to be there. The U.S. government said it plans to start starting promoting booster shots online: www.reuters.org/ ; com world us start-offering-covid - 19 - vaccine-booster - doses-september - 2021, 08 - 18 widely as soon as next week. If it was proven wrong, experts would be able to revive this idea without the support of politicians.
This week, leading scientists, including two departing U.S. Food and Drug Administration officials, said in an influential medical journal that additional booster shots are not required https://www.reuters.com. com world Us Covid - 19 - vaccine-boosters - not-widely - needed the general population - needed-top - fda-who - scientists-say - 2021 - 09 - 13.
In a note this week, SVB Leerink analysts estimated that the booster market is likely to add another $4 billion in U.S. revenue potential to $3 billion to $4 billion for existing vaccines.
Substantial booster revenue for the companies are already contemplated in consensus estimates, the Leerink analysts said, making the stock impact for Moderna dependent on the breadth of the recommended population and boosting interval in particular. An already powerful rally in Moderna shares went into overdrive this summer, as index manager were forced to buy the stock after it was added to the S&P 500 and as concerns rose over resurgence in COVID 19 cases due to the spread of the virulent Delta variant of the virus.
The stock has been volatile since joining the index in mid July, with Moderna shares either the biggest daily percentage gainer or loser in the S&P 500 in 10 trading days since joining the stock - a quarter of all the sessions over that time.
Analysts are cautious of the stock, even as the company develops other products including a vaccine that combines a booster dose against COVID-19 with its experimental flu shot https: www.reuters.com Healthcare-pharmaceuticals moderna-developing single dose combination-vaccine - conjugal medicine - covid 19 flu - 2021 - 09 - 09.
Using earnings estimates for the next 12 months, Refinitiv shares trade at a price-to-earning ratio of 15.8, according to Moderna datastream. That is more expensive than the 11.4 times P E of S&P 500 biotech companies in general, but cheaper than 17.7 of the S&P 500 healthcare sector.
Although Oppenheimer is trading at about 15 times estimates of its sales in five years - a valuation level that significant biotechnology stocks with one key product have peaked at historically, according to Hartaj Singh, an analyst for Moderna. In August, Singh downgraded his rating on the stock to neutral.
I don t expect the stock to go down unless there is some unambiguous bad news that come across, Singh said. I do feel that a lot of the good news is already in the stock valuation.