Forget COVID: Moderna Is Turning Into a Cancer Company — and Wall Street Is Taking Notice

Moderna (MRNA +6.70%) leaped into the spotlight during the early days of the pandemic, and that was because the up-and-coming biotech player had a solution to the problem: a vaccine. The company became one of the first to launch a coronavirus vaccine, rivaling pharma giants such as Pfizer, and generated blockbuster revenue from the product. At the vaccine’s peak in 2022, it brought in more than $18 billion in revenue and made Moderna profitable.

Recent years have been difficult, however, as demand for the vaccine declined. The company saw revenue drop, swung to a loss, and its stock price, once soaring in the triple digits, followed.

But Moderna may be entering a new period of growth and success right now. Over the past few years, the company has taken steps to address its problems and has focused its pipeline on a particularly high-growth therapeutics market: oncology. Importantly, investors have recognized Moderna’s potential, helping the stock soar more than 600% this year.

Forget COVID: Moderna is turning into a cancer company, and Wall Street is taking notice. Let’s find out more.

Image source: Getty Images.

Moderna’s expertise in mRNA

As mentioned, Moderna’s initial successes came with the coronavirus vaccine. There, the company could demonstrate its messenger RNA technology and its strength in designing safe and efficacious vaccines. Moderna uses mRNA to teach the body to make proteins that will defend it from or treat disease. The approval of the coronavirus vaccine was a big moment, as it served as a vote of confidence in Moderna’s technology.

Since that time, Moderna has maintained its respiratory vaccine work, winning additional approvals such as nods for a respiratory syncytial virus (RSV) vaccine and a flu vaccine. But where the company may stand out in the future is in another area, and that’s oncology.

Moderna is testing its personalized cancer vaccine, intismeran autogene, in 10 clinical trials, and several of these have reached late-stage testing. Just recently, the biotech announced positive phase 3 results for the candidate, paired with Merck‘s Keytruda, for the treatment of melanoma. The combo treatment met recurrence-free survival goals, and the companies say they will now pursue talks with regulators regarding the filing of submissions.

Moderna’s vaccine is personalized, so it isn’t an off-the-shelf product that can be mass-produced in advance. This means it’s likely to involve a longer, more complex rollout if approved, as well as higher manufacturing costs. All of this suggests that even in the best scenario, a product approval won’t result in a speedy ramp-up and overnight revenue gains.

A potentially game-changing approach to cancer treatment

That said, this could be the beginning of a high-potential story for Moderna. The global oncology market was valued at about $253 billion last year and is forecast to reach more than $700 billion by 2034, according to DelveInsight research. A personalized approach could be game-changing, meaning that even if the ramp-up is slow, the eventual revenue opportunity might be significant. It’s important to keep in mind that cancer remains an area of great need, with doctors and patients looking for new and better treatments to improve quality of life and extend life. So there is plenty of room in this space for new products.

What does all of this mean for you as an investor? Moderna has convinced Wall Street of its potential, as we can see through its stock performance in recent months. That said, the stock, trading at about $218, has climbed well above Wall Street’s average price target of $123. This means we could see some stagnation in the coming months, or we might even see the stock pull back somewhat.

It’s important to keep in mind, though, that Moderna may be in the early days of a new growth story, and one that could be long-lasting considering the deep opportunity in the oncology market. And that makes it a fantastic stock to hold onto for the long term.