Right now, modern (mRNA -6.43%) is making billions from its coronavirus vaccine. But this innovative biotech company has its eye — and research — on another big opportunity. And soon you may find yourself in a second billion dollar market. That’s the flu market.
Wait a minuteyou may be saying. The flu? When you think of flu vaccines, you may not necessarily think of a huge market opportunity. Many players already share the market. And no one is talking about flu shots being blockbuster revenue. But there may be more to this market than meets the eye. Let’s find out why this may be Moderna’s next success story.
Today’s flu market
First, a look at the current flu market. It is worth around $5 billion to $6 billion. US health officials recommend nine flu shots for use during the upcoming season. Four different pharmaceutical companies make these vaccines. market leader Sanofi it generated $2.6 billion last year from sales of its flu shots.
So how could a new player make a big mark on this scene? Well, the market is evolving. And it is moving towards the idea of better and more effective vaccines. For example, a vaccine targeting the latest strain of flu in a particular country. Or even a combination vaccine that targets both the flu and another virus, like the coronavirus. Moderna is working on both.
The company’s flu candidate recently began a phase 3 study. Going forward, Moderna’s big goal is to commercialize combination respiratory vaccines. The company is studying a vaccine candidate against coronavirus plus influenza in phase 1. And it is exploring a candidate that covers influenza, coronavirus and respiratory syncytial virus in preclinical studies. Moderna expects that candidate to begin phase 1 testing by the end of the year.
Combination vaccines represent a great opportunity. This is because people are likely to prefer to receive a series or a single vaccine that covers two or three viruses rather than receive several vaccines. And healthcare providers will gain in efficiency.
Returning to the topic of more specific effective vaccines, Moderna says that these “premium” vaccines could result in a larger flu vaccine market overall. And the company says that these vaccines deserve higher prices, for example, more than $50 per dose. For the upcoming flu season, vaccines range from $18 to $28 per dose.
All of this means that tomorrow’s flu opportunity may be very different from the flu market of a few years ago, or even today. And Moderna could be among the first to benefit. Moderna has said it may launch three respiratory vaccines in the next two to three years. And one of those is the flu candidate.
At the same time, Moderna predicts that the annual market for coronavirus vaccines in the US alone may range from $5.2 billion to $13 billion. The exact number will depend on the price of the vaccine and its acceptance among the population. But even at the low end, Moderna has still secured a blockbuster product.
If all goes well with the flu candidate, Moderna may add a second blockbuster vaccine to its repertoire.
What does this mean for investors?
Moderna may be on its way to dominating not just one, but two billion-dollar vaccine markets in the next few years. Taking this into account, Moderna’s price of 5.2 times future earnings estimates looks pretty cheap.
Of course, Moderna stock may not soar in a short period of time like it did at the start of the pandemic. But for long-term investors, it’s fine. Over time, Moderna can prove that its first product will continue to thrive. And at the same time, the company could stand out and transform other important markets.
So right now is a great time to buy or hold Moderna stock and watch the company enter an exciting new chapter.