Since the outbreak of the pandemic last March, Moderna (NASDAQ: MRNA) has risen around 430%, mainly due to the vaccine rollout. Although there was a spike after its initial vaccine announcement, the Moderna share price has been rather volatile since. With it currently sat at $160, here I am going to look at whether now I deem a good time to add Moderna to my portfolio.
A solid 2021
The rest of 2021 looks set to mark a good period for Moderna. With Q1 revenues recently announced at $1.9bn, this is substantially more than the $571m revenue of Q4 last year. Moderna recently stated it intends to supply 800 million doses of Covid-19 vaccines in 2021 and three billion in 2022 – a factor that is likely to continue to boost revenue. This places my confidence for the future Moderna share price in good stead, as the large demand is likely to continue.
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Moderna also recently announced it had signed advance purchase agreements for $19.2bn, all for Covid-19 vaccines, set to be delivered this year.
Many analysts also seem to remain positive about the Moderna share price for the future, regardless of the intellectual property (IP) rights scare (explained below). Goldman Sachs raised its target price on the biotech stock to $228, up from $206. Barclays also raised its target to $194 from an original $178.
Not all good news
However, I cannot see the long term providing opportunities for a rise in the Moderna share price.
Firstly, although the rest of 2021 and potentially 2022 provides optimism for Moderna, after this I can see the Covid-19 vaccine market falling off. I suspect by the end of 2022 that a large proportion of populations would have been vaccinated. As a result of this, I predict demand to drop – and therefore more than likely a fall in the Moderna share price.
Another negative is the recent announcement by the Biden administration coming out in support for the suspension of Covid-19 vaccine IP rights. This could allow lesser-developed countries to create vaccines locally, potentially affecting the revenue of Moderna. Countries such as India, with its current huge infection problem, could opt for cheaper ways to inoculate its large population.
Although many analysts remain positive about the future Moderna share price, I do not share the same levels of optimism.
I see the IP rights narrative, supported by the World Trade Organization, potentially posing a real problem for Moderna should it go ahead. Prior to the pandemic, the Moderna share price hovered between $18-$25. With it currently sat well over $150, should the vaccine rollout come to an end within the next few years, what is to stop the share price from falling back down to these levels?
From a short-term perspective, I see potential in the Moderna share price for the rest of 2021 and possibly 2022. However, I tend to view stocks with a long-term outlook. As such, I am opting against buying Moderna any time soon.