The presence of RFK Jr. is causing concern among investors regarding a former standout in the vaccine field
All these stocks have had a bumpy journey back to "normal," let's face it. But none seem to have experienced a rougher trajectory than Moderna.
Originating in modest Cambridge, Massachusetts, in 2010 as a small startup, Moderna expanded to become the largest US biotech IPO in 2018. Wall Street was head over heels for Moderna's mRNA research, despite the company having no marketed products at the time and not planning to launch any until 2025 at the absolute earliest.
The pandemic came along and disrupted the timeline. In the spring of 2020, the US government partnered with Moderna for Operation Warp Speed (a fantastic name), and within nine months, Moderna, Pfizer, and BioNTech started shipping out hundreds of millions of vaccines.
Moderna's stock price soared to unparalleled heights in August 2021, peaks that represented a staggering 2,000% increase from its initial public offering. But the stock has since plummeted 90% from its high, and analysts at Bank of America predict it will fall even further.
While acknowledging that "it's a tough time to be a vaccines company" (we'll chat about that in a bit), Moderna continues to burn cash on research and development and, according to its own forecasts, won't turn a profit until 2028.
"There are simply too many layers of uncertainty at present," the analysts wrote. Moderna's Covid-19 vaccine is the primary revenue driver, and their RSV vaccine, while in the works, is unlikely to garner significant revenue, they concluded.
Investors, not surprisingly, are betting against Moderna, as the company now ranks among the top five most shorted stocks in the S&P 500, according to a report by S3 Partners. Moderna declined to comment on its stock movements or analyst coverage.
"Moderna's declining stock price, rising short interest, and increased implied volatility convey an evolving risk narrative," the S3 report stated.
In simpler terms, investors are concerned that Moderna might amount to a flash-in-the-pan sensation, especially if the incoming Trump administration succeeds in installing vocal vaccine skeptics like Robert F. Kennedy Jr. in key positions of power.
To be fair, this risk applies to all vaccine manufacturers.
A month ago, when Trump announced RFK Jr. as his pick to head the Department of Health and Human Services, shares of prominent vaccine manufacturers, including Moderna, Pfizer, and Novavax, plummeted across the board. Kennedy is a well-known anti-vaccine conspiracy theorist with such outlandish beliefs that 77 Nobel laureates wrote a letter to senators urging them to oppose his appointment to HHS.
No one knows yet just how far RFK Jr., if confirmed, will go in attempting to discourage or limit vaccines, but Wall Street doesn't seem especially optimistic.
After becoming the largest US biotech IPO in 2018, Moderna's business relied heavily on its mRNA research, despite having no marketed products.
Despite Moderna's success in developing a Covid-19 vaccine, analysts predict that its stock will continue to decline due to uncertainties and rising short interest, suggesting concerns about its longevity as a profit-making entity.
