Moderna stock, which lost 27% of its value over two days last week, tumbled again Monday on a rare downgrade amid increasingly uncertain outlooks for its RSV and Covid vaccines.
RBC Capital Markets analyst Luca Issi cut his rating on Moderna shares to sector perform from his previous outperform rating. He also slashed his price target to 90 from 125. That followed a downgrade last week from Morningstar Equity Research's Karen Andersen.
RBC's Issi says he's a big long-term believer in the messenger RNA technology Moderna uses to develop its vaccines. This is the backbone behind the Merck-partnered cancer vaccine.
"However, in the short-term, Moderna is facing material headwinds for both RSV (respiratory syncytial virus) and Covid," he said in a report.
On the stock market today, Moderna stock fell 3.3% to 83.75, paring steeper losses in earlier trades. Shares undercut their 200-day moving average on Aug. 1 after the biotech slashed its outlook for the year, citing troubles in the Covid vaccine market.
Moderna Stock: Pfizer Gains Steam
For the year, Moderna now expects $3 billion to $3.5 billion in sales. That's down from its prior guidance for at least $4 billion. The company's biggest moneymaker remains Spikevax, the Covid vaccine. But Moderna now expects "very low" sales in the European Union.
Further, Pfizer and BioNTech's rival shot, Comirnaty, appears to be gaining steam, RBC's Issi said. Last year, Moderna said it won about 50% 0f the U.S. market for Covid vaccines, up from 40% in 2022.
"Moderna implied last week that Pfizer is regaining momentum now that fall 2024 contracts are in place," he said. "This is also indirectly validated by Pfizer reiterating their guide ($5 billion for Comirnaty) vs. Moderna lowering it (topline from about $4 billion to $3 billion to $3.5 billion)."
Moderna's projection for very low Covid vaccine sales in Europe is also likely to extend into 2025 given Pfizer's contract with the European Union isn't due to expire until 2026, Issi said.
Broadly, Moderna stock analysts now expect Spikevax to bring in $2.99 billion in sales this year, according to FactSet. The Street projects $5.05 billion from Pfizer's Comirnaty.
RSV Vaccine Troubles
Moderna is also late to the RSV vaccine race, where it rivals GSK and Pfizer. Moderna gained Food and Drug Administration approval for its shot, mResvia, roughly a year after its rivals won their approvals.
In the first four quarters of their launches, GSK's Arexvy and Pfizer's Abrysvo have generated a respective $1.8 billion and $1.1 billion in sales over their first four quarters on the market.
"Contracts for the fall remain confidential, but GSK commented publicly that they anticipate to retain market leadership while Pfizer mentioned that they have significantly strengthened their contracting position vs. last year," Issi said.
Moderna, on the other hand, says this year is "not turning out as expected." Contracts were already negotiated by the time mResvia gained approval. Notably, GSK and Pfizer might be able to bundle their RSV vaccine with other drugs in the contracting process.
'Small Piece Of The Pie'
Bearishly for Moderna stock, the Advisory Committee on Immunization Practices recommended RSV vaccines be given only once. Flu and Covid vaccines are given annually. Moderna has argued that protection from RSV shots wanes over time, but GSK's shot offers durable protection.
"We struggle to see a scenario where ACIP quickly reconsiders its position," Issi said.
Moderna was hoping its pre-filled syringe would help it capture more share than Pfizer and GSK. The latter vaccines require the provider to pull the solution from a vial using a needle.
Still, "it is clear to us that Moderna will likely only capture a relatively small piece of the pie this year and the annual pie is smaller than originally anticipated," he said.
Issi lowered his forecast for peak mResvia sales from $3 billion to $2 billion.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
