The world is "poking" at each other. The aim is to finally stop the pandemic by vaccinating as many people as possible against the coronavirus. Eleven vaccines are now in use worldwide. Two trigger an immune response with the help of messenger ribonucleic acid (mRNA): As soon as the vaccinated person comes into contact with Covid-19, the immune system has a kind of blueprint for the antigen and can fight the infection quickly and specifically. In addition to the transatlantic duo Biontech/Pfizer, Moderna supplies an mRNA vaccine. Within less than nine months, the US biotech company has developed a Covid-19 vaccine. Clinical trials started on March 16, 2020, and Moderna received emergency approval in the US in late November. Ten years after its founding, this success elevated the Cambridge, Massachusetts-based company to entirely new heights.
At nearly USD 70 bn, Moderna's market capitalization exceeds the end-April 2020 level by 240% (see chart). In the current fiscal period, the company should break even in impressive fashion. "I believe that 2021 will be the most important turning point in Moderna's history," CEO Stéphane Bancel wrote in the 2020 annual report. On the revenue side, the biotech company has already taken a leap. In 2020, revenues increased by more than a factor of 13 to USD 803.4 million. However, high research and development costs in particular caused the loss to swell by 45% to almost three quarters of a billion USD. This should change in the current period. The CEO holds out the prospect of black figures. In addition, Bancel forecasts a positive cash flow for every single quarter.
The CEO wants to sell up to one billion doses of the Moderna vaccine in the current year. In 2022, the volume should increase to up to 1.4 billion doses. The biggest customer is the USA. Washington has secured 300 million servings of Moderna along with an option for another 200 million cans. In recent months, the company has greatly increased capacity together with its Swiss production partner Lonza. Initially, shipments were mostly to the US (see chart). In Q1 2021, the States received nearly 90m Moderna doses for an average price of USD 15.40. Outside the home market - the EU alone wants 460m servings - the price is higher. Depending on volumes, it ranged between USD 22 and USD 37 per dose in the past quarter. Investors will find out how this mix affects the figures on May 6. That's when Moderna publishes its Q1 2021 interim report.
The CEO may already reveal the first details at the Annual General Meeting on April 28. In any case, the product pipeline is likely to play an important role at the event. Not only are Moderna's researchers currently in the process of developing a vaccine booster that is also intended to treat various Covid 19 mutants. But at the same time, they are working on other active substances. One of the most promising candidates is mRNA-1647, a vaccine against cytomegalovirus (CMV) that is due to enter phase III trials this year. If approved, Stéphane Bancel expects the compound to generate peak annual sales of between USD 2 and USD 5 billion. It's not there yet. In addition to research setbacks, a potential glut of Corona vaccines could slow down Moderna's stock. The CEO himself recently said he thinks oversupply is possible next year.
Investors shying away from direct investment in the face of a steeply rising share price may be interested in new soft-callable barrier reverse convertibles on Moderna. Leonteq offers the popular structure in two different currencies. In the CHF product currency, the guaranteed coupon is 13.00% p.a.. In the USD version, the payout is 100 basis points higher. The barriers are uniformly set at 59% of the initial fixing. As long as the Nasdaq stock does not fall to or below this level, investors will receive their nominal back in full at maturity. If, on the other hand, the threshold is breached, the partial protection expires. In this case, the product would be exposed to Moderna's full price risk. Please note: Due to the soft callable feature an early redemption of the Barrier Reverse Convertible expiring after 15 months at the latest is possible.
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