Moderna's (MRNA +0.58%) shares have already soared by 92% this year. Yet, the biotech is racing toward another catalyst. The company could receive an important regulatory approval on Aug. 5. Should investors purchase Moderna's shares before then?
Is there more upside ahead?
Moderna developed mRNA-1010, an investigational flu vaccine. mRNA-1010 posted better efficacy numbers than some approved products in this category in phase 3 clinical trials. There is a large unmet need here, since the flu continues to cause thousands of hospitalizations every year, especially among older adults, the demographic Moderna is targeting with mRNA-1010.
The U.S. Food and Drug Administration (FDA) set a PDUFA goal date -- or the target deadline by which it will either approve or reject Moderna's application for mRNA-1010 -- of Aug. 5.
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Could the biotech's shares soar if it receives regulatory approval for this candidate? That's unlikely to happen, as this success is almost certainly already baked into the company's share price. After all, a few weeks ago, an FDA advisory committee unanimously affirmed that mRNA-1010's benefits outweigh its risks, sending Moderna's shares sharply higher. And since then, the stock has moved mostly in the wrong direction, signaling that some investors may have used this opportunity to pocket some profits.
NASDAQ: MRNA
Key Data Points
So, it doesn't make much sense to invest in Moderna today expecting the stock to jump on Aug. 5. The good news is that there are other reasons to buy the company's shares. Moderna has a deep pipeline of mRNA-based vaccine candidates, at least some of which may become breakthroughs in their respective niches. Given the company's late-stage pipeline, it could have at least a couple more products approved within the next three years, helping it improve its financial results while reducing its exposure to its coronavirus business, which has not been performing well lately. The stock is a buy for those reasons.
