Shares of Moderna dropped Tuesday to pull back from the previous session’s record close. This came as investors moved to take profits off the table after the company reported hugely successful interim results from a clinical trial of its coronavirus vaccine (mRNA-1273) on Monday.
The stock had soared 9.6% on Monday to close at a record $97.95 after the company said data from a late-stage trial demonstrated that the jab was more than 94% effective and that the vaccine remained stable at normal refrigerated temperatures longer than previously expected.
Moderna’s announcement came a week after Pfizer and BioNTech said their vaccine candidate was more than 90% effective but needed to be stored at ultra-cold conditions. However, in active afternoon trading on Tuesday, the biotech firm’s stock fell 5.2% to end a four-day win streak and mark just the second loss in 11 sessions.
The plunge came despite an earlier announcement by the company that it had secured a deal with the U.K. for the supply of its COVID-19 vaccine and that the European Medicines Agency (EMA) was reviewing its regulatory filing for approval of the vaccine candidate.
Investors often sell off some of their shares in a company following major announcements in order to make quick profits, with the belief that the best-case scenario on the company is already mostly priced in or reflected in its shares.
In Moderna’s case, investors see a limited upside from current trading levels following the announcement of the positive trial data, a supply deal with Britain, and the likelihood of getting approval from the EMA. The belief is that the company’s market cap of close to $35 billion already prices in much of its prospects for the vaccine.
Despite current prices, however, analysts remain upbeat on Moderna’s potential over the longer-term. “Today’s downswing doesn’t mean much in the big scheme of things. Profit-taking following a major announcement isn’t unusual. However, it doesn’t impact Moderna’s prospects at all,” Keith Speights writes on The Motley Fool, a finance and investment analysis website.
The biotech’s prospects now appear to be “better than ever,” he notes, adding that the solid safety and efficacy profile of Moderna’s vaccine “should bode well for the COVID-19 vaccine winning Emergency Use Authorization (EUA) in the U.S. and regulatory approvals in other countries.”
In addition to the UK, Moderna has supply deals in place with a number of countries including the United States. It plans to produce around 500 million doses of the vaccine in 2021, reports say.
Investors’ attention now turns to Moderna’s anticipated filing for emergency use authorization for its vaccine. The company expects to have enough safety data to apply for the approval at the U.S. Food and Drug Administration by November 25.
If Moderna wins the filing, today’s decline will “almost certainly be totally forgotten,” Keith notes. But if it fails to get its vaccine candidate past the FDA, investors selling now would have made a good decision to take some fast profits.