Covid vaccine makers Moderna BioNTech stocks, mRNA strategies diverge

The Covid-19 pandemic turned Moderna and BioNTech into household names almost overnight. Now the 2 corporations are on different paths.

Each Moderna and BioNTech helped pioneer mRNA, or messenger RNA, technology. Moderna staked its entire identity around mRNA, while BioNTech saw it as one piece of a broader portfolio focused on immunology and oncology. The pandemic gave each corporations a likelihood to prove mRNA’s promise of using the body’s own immune system to guard against viruses or treat diseases. 

Covid vaccines have generated roughly $45 billion in sales for every company, earning them each about $20 billion since their rollout in late 2020. But despite parallel booms after the pandemic, the vaccine makers have since taken their businesses in numerous directions — and Wall Street has noticed.

The 2 corporations have spent their Covid vaccine windfall in a different way: Moderna doubled down on its mRNA pipeline, while BioNTech used the cash to do deals and diversify, including into considered one of the most well liked emerging areas of cancer drugs. Today, Moderna has about $8.4 billion in money; the German-based BioNTech has €15.9 billion (or $18.2 billion). 

The divergence of the 2 corporations is much more stark of their stock performance. Over the past yr, Moderna shares have slid about 72%; BioNTech shares have gained nearly 29%. 

“Just their name was made based off the pandemic and the vaccines that they in a short time dropped at people all over the world to assist get us through that time period,” said Evercore ISI analyst Cory Kasimov. “However the approach they’re taking now and the outlook for these two corporations is distinctly different at this point.”

Investors will get a fresh take a look at each corporations’ performance as they post quarterly ends in the approaching days. Moderna is ready to report Friday morning, followed by BioNTech on Monday morning.

Moderna took one other step to chop costs Thursday because it announced it’ll slash roughly 10% of its workforce by the top of the yr.

Moderna used its Covid money to construct out its mRNA portfolio, particularly vaccines. It invested in shots for flu, RSV and lesser-known viruses like cytomegalovirus and norovirus. 

“From our perspective, the pandemic really showed that the science of what we’re doing worked, and the natural kind of response to that was to proceed down that path and do more,” said Moderna President Stephen Hoge.

Funding such a big pipeline wasn’t low cost. The corporate has began slashing expenses as sales of its Covid vaccine slide and its RSV vaccine struggles to search out a foothold. However the clock is running, said Leerink analyst Mani Foroohar. 

“We’re moving right into a time where being a vaccine company goes to be costlier, tedious and onerous,” Foroohar said, citing changes on the Food and Drug Administration under the leadership of Health and Human Services Secretary Robert F. Kennedy Jr., who has expressed skepticism about vaccines.

Foroohar in 2022 identified what he saw as a Shakespearean tragic flaw in Moderna’s business model. That shortcoming, in his view, is that Moderna scaled its pipeline assuming mRNA technology can be the tool for all problems as a substitute of an answer for some problems. 

Hoge said Moderna’s “really good at making mRNA medicines” and decided to deal with doing that.

“The fact is that we expect during the last 10 years, that focus has actually made us successful, and within the pandemic, it actually had a huge impact and clearly was something that sets us up for the more diverse pipeline we’ve straight away,” Hoge said. “So we recognize that we could also be going through some cycles, but we’re pretty confident within the long-term trajectory we’re on, and we’re looking forward over time ahead to showing with all these additional medicines what we’re really able to.”

Meanwhile, BioNTech decided to make use of the proceeds from its Covid vaccine to diversify. Out of the limelight as partner Pfizer took the lead on selling the businesses‘ shot, BioNTech expanded into promising recent cancer technologies.

Most significantly, it acquired a bispecific antibody targeting the proteins PD-L1 and VEG-F. That technology guarantees to construct on – and possibly best – the success that Merck has found with Keytruda, a cancer drug with nearly $30 billion in sales last yr alone. 

That thesis still must be proven in large, global clinical trials, but BioNTech is already seeing that deal repay. Bristol Myers Squibb in June announced it will pay as much as $11 billion to partner with BioNTech to codevelop the experimental drug, which BioNTech acquired for a fraction of that. BioNTech in 2023 initially paid Biotheus $55 million up front to license the drug outside China before acquiring the corporate outright earlier this yr for as much as $1 billion.

At the identical time, hopes are high that BioNTech’s bispecific antibody drug will work, meaning any disappointment ahead could hurt the stock. Investors are watching forthcoming Phase 3 trial results from Summit Therapeutics, which is testing the same drug for lung cancer. Those data could help — or hurt — BioNTech’s stock while it awaits data from its own studies, which could take until 2028.

For Moderna, investors need to see if sales of its Covid and RSV vaccines can rebound. The corporate can also be in search of FDA approval for an mRNA flu shot. But at this point, probably the most intense focus is on Moderna’s Phase 3 trial for a customized cancer treatment for melanoma, said RBC Capital Markets analyst Luca Issi. 

Moderna may have the opportunity to share the primary interim data as soon as next yr, Hoge said, though the corporate cannot promise an actual date because it’s an event-driven study. Meaning enough people within the trial must relapse before Moderna can analyze whether its treatment kept cancer from returning longer. If the treatment succeeds, it could launch in 2027 or 2028, Hoge said. 

That leaves Moderna largely depending on its vaccines until then. An ongoing patent dispute over Moderna’s Covid-19 shot could also eat into the corporate’s money, analysts say, adding they expect the legal proceedings to play out next yr.

Time will tell whether the divergent strategies win over Wall Street long run.