Moderna’s $40 bln shot gain

2 minute read

Walmart pharmacist holds a vial of the Moderna coronavirus disease (COVID-19) vaccine inside a Walmart department store in West Haven, Connecticut, U.S., February 17, 2021. REUTERS/Mike Segar/File Photo

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NEW YORK, Nov 29 (Reuters Breakingviews) - Investors have assumed the worst read more about a Covid-19 variant, and that’s good for Moderna’s (MRNA.O) share price. Since Nov. 24, the vaccine maker has added $40 billion to its market capitalization, more than a third. That’s pricing in over 3 billion additional shots, which is rosy.

The World Health Organization says evidence suggests higher rates of reinfection among those who have already contracted the virus. It implies waning vaccine efficacy, and more need for boosters. However, while there might be more jabs, in the long-run, a few read more doses should suffice.

That’s roughly the status quo, yet investors are assuming far more shots in the future. Moderna has sold vaccines at roughly $22 apiece this year, and its net margin next year is estimated to be about 54% according to Refinitiv estimates. At a profit of nearly $12 per shot, investors are assuming 3 billion additional shots sold based on its market gain.

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Moderna also has competition. Pfizer (PFE.N) tacked on $12 billion, implying it and partner BioNTech (22UAy.DE) will sell billions of shots too. The new variant suggests building immunity will take some tweaking. That doesn’t mean investors are Teflon. (By Robert Cyran)

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Editing by Lauren Silva Laughlin and Sharon Lam

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