COVID vaccine makers, including Moderna, pledged to only seek approval after Phase 3 testing
Shares of Moderna (MRNA) are sliding on Tuesday after SVB Leerink analyst Mani Foroohar downgraded the stock to Underperform, a sell-equivalent rating, citing rising COVID-19 vaccine competition. The analyst argued that recent developments - including the loss of mRNA-1273's lead in clinical development, the extension of multiple large volume COVID-19 vaccine contracts to competitors, and a risk of reduced end-user demand due to increased skepticism for vaccines rushed to market - make a "durable market with oligopoly pricing unlikely."
RISING COMPETITION: In a research note to investors, SVB Leerink analyst Mani Foroohar downgraded Moderna to Underperform from Market Perform with a price target of $41, down from $58. The analyst argued that recent developments, including the loss of mRNA-1273's lead in clinical development, the extension of multiple large volume COVID-19 vaccine contracts to competitors, and the risk of reduced end-user demand due to increased skepticism for vaccines rushed to market, make a "durable market with oligopoly pricing unlikely."
While the probability of an Emergency Use Authorization from the Food and Drug Administration for mRNA-1273 in the fourth quarter is high, Moderna's speed to market has fallen behind competitors, said the analyst, who is "no longer able to find an avenue to confidently predict beats" versus 2021 estimates "even with aggressive assumptions." Further, the analyst believes as investors digest the "changing competitive environment" for COVID vaccines, Moderna shares will continue to face pressure ahead of first commercial sales this winter.
COVID VACCINE PLEDGE: The CEOs of AstraZeneca (AZN), BioNTech (BNTX), GlaxoSmithKline (GSK), Johnson & Johnson (JNJ), Merck (MRK), Moderna, Novavax (NVAX), Pfizer (PFE), and Sanofi (SNY) have announced a pledge, outlining a "united commitment to uphold the integrity of the scientific process as they work toward potential global regulatory filings and approvals of the first COVID-19 vaccines."
The statement reads in part, "We, the undersigned biopharmaceutical companies, want to make clear our on-going commitment to developing and testing potential vaccines for COVID-19 in accordance with high ethical standards and sound scientific principles. The safety and efficacy of vaccines, including any potential vaccine for COVID-19, is reviewed and determined by expert regulatory agencies around the world, such as the United States Food and Drug Administration. FDA has established clear guidance for the development of COVID-19 vaccines and clear criteria for their potential authorization or approval in the US. FDA's guidance and criteria are based on the scientific and medical principles necessary to clearly demonstrate the safety and efficacy of potential COVID-19 vaccines. More specifically, the agency requires that scientific evidence for regulatory approval must come from large, high quality clinical trials that are randomized and observer-blinded, with an expectation of appropriately designed studies with significant numbers of participants across diverse populations. […] We believe this pledge will help ensure public confidence in the rigorous scientific and regulatory process by which COVID-19 vaccines are evaluated and may ultimately be approved. We believe this pledge will help ensure public confidence in the rigorous scientific and regulatory process by which COVID-19 vaccines are evaluated and may ultimately be approved."
The companies also pledged to "only submit for approval or emergency use authorization after demonstrating safety and efficacy through a Phase 3 clinical study that is designed and conducted to meet requirements of expert regulatory authorities such as FDA."
PRICE ACTION: In afternoon trading, shares of Moderna have dropped almost 11% to $55.98.