Chart of the Week: Covid-19 Vaccine Maker’s Share Price Soars
Author: Tim Phillips
August 13, 2021
Coming into the Covid-19 pandemic, the technology behind today’s prominent vaccines was unheard of. That has changed drastically for the companies behind the vaccines and, subsequently, for investors.
Some of the biggest stock market winners so far in 2021 have been the biotech firms behind the vaccines helping protect people from Covid-19.
While everyone associates the “Pfizer-BioNTech” vaccine with the pharmaceutical giant Pfizer Inc (NYSE: PFE), it’s actually German biotech firm BioNTech SE (NASDAQ: BNTX) that has been the big winner.
Its shares are up over 330% so far in 2021 versus Pfizer’s 28% year-to-date gain. However, it’s 10-year-old biotech firm Moderna Inc (NASDAQ: MRNA) that has really caught the imagination of investors.
Boston-headquartered Moderna didn’t have an approved product to speak of in 2020 but its groundbreaking Covid-19 vaccine built on messenger RNA (mRNA) technology has catapulted it into the big leagues.
Soaring stock price
Moderna reported its second-quarter 2021 earnings earlier this week. In anticipation of its results, investors had pushed Moderna stock to an all-time high of over US$480.
It has since fallen back on profit-taking but, so far in 2021, Moderna shares are still up 250% (see below).
Remarkably, in the first six months of 2020 it generated exactly $0 from product sales – essentially meaning it recorded no revenue besides some negligible amounts from grants and collaborations.
Fast forward to the first six months of 2021 and product sales totalled US$5.9 billion as demand for Moderna’s Covid-19 vaccine has skyrocketed.
For investors, though, the optimism for future revenue comes from Moderna’s extraordinary pipeline of potential ailments that its mRNA technology could help treat.
These include diseases ranging from cystic fibrosis to a range of cancers and autoimmune diseases. The runway for growth if future treatments are approved is immense.
With a share price that is up over 470% in the past year, and a market cap of nearly US$160 billion, investors are clearly pricing shares for the possibility that this biotech could become one of the world’s most valuable companies in the next decade.
Source: Google Finance, as of 13 August 2021
Disclaimer: ProsperUs Head of Content Tim Phillips doesn’t own shares of any companies mentioned.
Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.
He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be.
In his spare time, Tim enjoys running after his two year-old son, playing football and practicing yoga.