# Moderna nears its first-ever FDA authorization, for its COVID-19 vaccine

The regulator on Tuesday called mRNA-1273 “highly effective” in a report published in advance of a FDA advisory committee meeting scheduled for Thursday that will allow a group of independent medical experts to discuss the risks and benefits of the still investigational vaccine. This is the final regulatory step before the FDA decides whether to authorize the vaccine.

Moderna has said its coronavirus vaccine candidate has an efficacy rate of about 94%, based on data from clinical trials.

Unlike Pfizer Inc.
PFE,
-1.16%,
a traditional pharmaceutical companies company with a wide-ranging portfolio of commercialized medicines that last week received emergency authorization from the FDA for the COVID-19 vaccine it developed with German biotech BioNTech
BNTX,
-2.61%,
Moderna has never had one of its investigational products make it as far along in the regulatory process as it has with mRNA-1273.

The company, which has no FDA-approved or authorized products, has seen its market capitalization increase to about $54.3 billion in recent trading from just $6.6 billion at the end of 2019, according to FactSet data. In comparison, Pfizer’s market cap was $211.1 billion.

Moderna’s stock had tumbled to a low for the year at $17.78 on Jan. 7, five days before it announced plans to begin developing a vaccine aimed at preventing infection with what was then referred to as the novel coronavirus. At that time, the virus was still primarily infecting people in Wuhan, China.

Since then, Moderna’s stock had soared, closing at an all-time high of $169.86 on Dec. 8. In the last 11 months, the vaccine has moved through the three phases of clinical trials and Moderna has announced multiple deals with governments around the world to acquires doses of its vaccine candidate. This includes about $1 billion to support clinical trials and manufacturing build-out from the National Institutes of Health and the planned purchase of 200 million doses from the U.S. government.

“What has limited us in the past was capital,” Moderna CEO Stéphane Bancel said this month at an investor conference, according to a FactSet transcript of the call. “You could see us sitting on a very substantial balance sheet at the end of 2021, which I think will be an equitable stepping stone for us to scale Moderna.”

The rapid rise in Moderna’s value prompted Morgan Stanley analyst Matthew Harrison to downgrade the company on Wednesday to equal weight from overweight. Although Harrison sees “significant” potential for Moderna over the long term, any near-term COVID-19 value has already been largely priced into the stock.

The focus of the company’s research and development pipeline is the same mRNA, or messenger ribonucleuc acid, technology it is using for the COVID-19 vaccine. It’s been testing mRNA vaccines for cancers like melanoma and solid tumors, other infectious diseases like Zika, and some rare, inherited disorders like methylmalonic acidemia. None of the experimental vaccines have made it through mid-stage clinical trials except for its COVID-19 vaccine.

The FDA last week authorized the BioNTech/Pfizer vaccine one day after the advisory committee voted 17-4-1 that the benefits of their vaccine outweigh the risks. (The FDA isn’t required to follow the advice of the committee but often does.) The “no” votes from four of the independent medical experts on the committee were attributed to concern about allowing the vaccine to be administered to teens who are at least 16 years old.

See related: ‘Light at the end of the tunnel’: America’s nurses share their hope and relief as first colleague gets COVID-19 vaccine.

The authorization made the BioNTech/Pfizer vaccine the first to be authorized in the U.S. and marked the first time that regulatory approval of any kind was granted to a mRNA product.

Because Moderna is seeking authorization for people who are at least 18 years old, some analysts expect a unanimous vote in favor of the FDA authorizing mRNA-1273. “This should not be an issue for Moderna given the trial and EUA request,” Raymond James analyst Steven Seedhouse told investors on Wednesday.

Moderna’s stock has rallied 602.0% so far this year. The S&P 500
SPX,
+0.15%
has gained 14.5% since the start of the year.