Why Moderna Stock Shot Higher
- According to reports, Moderna is negotiating with China to provide the country with its mRNA COVID-19 vaccine.
- The firm estimates Chinese market potential sales to be billions of dollars.
What’s going on with Moderna stock
Shares of Moderna stock shot higher on Wednesday afternoon after CEO Stéphane Bancel made some positive comments. As a result, the messenger RNA (mRNA) vaccine and therapy specialist’s stock ended up almost 6.2% at the market closing yesterday.
Moderna (NASDAQ:MRNA) is in talks with the Chinese government about providing vaccines to the nation, Bancel said on Thursday. However, he would not reveal if Moderna has formally applied for permission to market its COVID-19 vaccine in China.
Why we care
Moderna’s stock is in dire need of some good news. The biotech’s shares have plunged by 44% this year amid worries that sales of its COVID-19 vaccine, Spikevax, may drop sharply soon.
The main problem is the U.S. vaccine market, which is highly profitable. If new booster shots are no longer recommended every few months in the country, it could harm coronavirus vaccine makers’ income. In addition, Congress has not been able to provide additional funding for U.S. coronavirus vaccination and testing programs. That means that people may have to start paying for their own vaccines from 2023 onwards, which could cause sales to decrease even more significantly.
However, a deal to sell Spikevax to China could significantly impact the biotech’s near-term performance. While pursuing a “zero COVID” strategy, China has had difficulties preventing new outbreaks. That’s probably partly due to the country’s present coronavirus vaccine lineup’s weakness. Moderna’s vaccine may play an essential role in China’s coronavirus response, possibly generating billions of dollars in revenue for the firm as a result.
Moderna stock shot higher, even though they stated that a vaccine supply deal with China is not guaranteed. However, the need for more effective vaccines in the country is apparent. Therefore, investors may want to wait for a finalized agreement before buying stock.