COVID Crisis creates Trading Opportunities

Moderna (MRNA-NASDQ) is one of the most talked about pharmaceutical stocks in 2020 due to its work on developing a COVID-19 vaccine.

At the beginning of 2020 (before COVID-19 was a news item), Moderna was trading at under $20 a share.

With its publicized participation in research for a vaccine, its stock more than doubled its value by April 19th reaching $50 a share. By July 12th, it would almost double again reaching $94.85 as talk about testing trials were more prominent.

Within 5 weeks, as news about a test confirmed vaccine with 94% effectiveness was ready for distribution, Moderna’s stock rose from $72.45 on November 1st to above $150 in early December.

On December 8thth, the USA’s Food and Drug Administration approved the competitor Pfizer’s vaccine for emergency use. On December 17th, the FDA will meet to discuss approving Moderna’s vaccine.

Both the Pfizer and Moderna vaccines use synthetic RNA (ribonucleic acid) to generate a protein found on the outside of COVID virus that sets off an immune response that is meant to eventually block the actual coronavirus from attaching itself to pre-existing healthy cells.

Both the Moderna and Pfizer vaccines will require two injections administered 28 days apart. One of the logistical challenges in administering both vaccines is that both require extremely cold storage facilities that many sites for vaccination (for instance many hospitals, clinics and almost all nursing homes) do not currently possess.

One advantage for Moderna is that its vaccine needs to be kept -20 degrees C for six months of shelf life or 30 days in a standard medical refrigerator while Pfizer must be kept at -70 degrees C to last 30 days and only has a shelf life of five days in a standard medical refrigeration. This could make Moderna much more suitable for distribution in more remote areas further away from extreme cold storage facilities.

The US government spent $1 billion to support development of the Moderna vaccine under Operation Warp Speed and spent $1.5 billion to secure the vaccine for American residents.

Moderna is slated to deliver 20 million doses by the end of 2020 and another 100-125 million doses by April 2021.

With a potential distribution of hundreds of millions to billions in the USA and across the world and possibly the need for yearly boosters (like for the flu), this Massachusetts based firm has been one of the market’s stars of 2020 with the potential to attract even more trading interest in 2021.