Moderna to be Added to S&P 500

Moderna’s Rise From Obscurity

Thanks to a COVID-19 vaccine that saved millions of lives, drugmaker Moderna’s (MRNA) stock has been on a tear. The company is being added to the S&P 500 Index, kicking out rival Alexion Pharmaceuticals (ALXN). Moderna currently has a market capitalization of more than $113 billion and has injected hundreds of millions of people with its COVID-19 vaccine. This is pretty impressive for a company that only a year ago had nine vaccines in clinical trials but not one product on the market.

Then the pandemic set off a race among pharmaceutical companies to develop an effective vaccine. Moderna’s successful vaccine helped the company become a household name.

Moderna’s Bets on mRNA Pay Off

Moderna’s ability to quickly bring an effective COVID-19 vaccine to the market was a result of work which had been taking place for years. When the company started in 2010, Moderna was developing drugs in stealth mode using messenger RNA or mRNA. When modified, mRNA teaches cells how to make the proteins necessary to fight back against an infection and prevent people from contracting an illness.

The technology behind mRNA proved invaluable when the pandemic hit. In mid-January 2020 the genetic sequence for COVID-19 was released by Chinese scientists, and by the end of February, Moderna was shipping its first doses of its vaccine for phase 1 trials. By December 2020, phase 3 trials demonstrated the vaccine’s 94.1% efficacy rate, prompting the FDA to clear it for emergency use in the US, Canada, and Europe.

Bulls and Bears Analyse Moderna

The COVID-19 vaccine, Moderna’s first commercially available product, has enabled the company to achieve profitability for the first time. It currently has 23 vaccines and therapeutic treatments in the pipeline focused on the flu, HIV, and Cytomegalovirus (CMV). All use the mRNA technology Moderna relied on to develop its COVID-19 vaccine.

That has some bulls betting that Moderna can become one of the biggest biotech companies in the market over the next decade. But bears point to the fact that the stock has had a huge run, the company only has one product on the market, and demand for the COVID-19 vaccine is waning. It will be interesting to see what comes next for Moderna.

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