Moderna's Phase 2 Flu Efficacy 'Likely In-Line' - BofA

BofA analyst Geoff Meacham raised the price target on Moderna (NASDAQ:MRNA) stock to $180.00 per share from the prior $170.00.

The analyst has reflected on the MRNA stock ahead of phase 2 H2H study readout for Modernas seasonal flu program, mRNA- 1010, likely due in the next few weeks.

While the lackluster tolerability profile was a headwind, the phase 2 H2H trial is testing lower doses, which could improve adverse events, but it will be a delicate balance of efficacy vs. tolerability. However, even with lower doses, our experts agree that mRNA-1010 is likely to show non-inferiority to the active comparator, our base case being HAI GM titers 9-11x higher for H1N1 and 7-9x higher for H3N2 vs. baseline. That said, other attributes (manufacturing speed) could support mRNA-1010 being superior, Meachem said in a client note.

The raised price target reflects an increase in the LoS for the flu program to 35% (from 25%) given BofAs updated outlook.

The analyst also noted that Modernas product is likely to be first to market, although Pfizer (NYSE:PFE) is catching up fast. Meachem sees Modernas advantage as less than a year due to the speed of development for mRNA vaccines.

Our experts noted that price could be a limitation for uptake, as traditional flu vaccines are cheap, so in order to see broad adoption, mRNA flu vaccines would have to be either priced in-line with traditional vaccines or show superior efficacy.

Brookline Capital Markets analyst Leah Rush Cann took note of Moderna submitting an amendment to EUA for an additional booster dose of mRNA-1273.

We believe that the benefit of second booster doses of mRNA-1273, regardless of the vaccine used for the primary series has been demonstrated post marketing, in the real world setting, to prolong immunity against SARS-CoV-2 and its variants. We believe the authorization for a second booster of mRNA-1273 could come at a crucial time in the pandemic management, when variants are continuing to emerge and immunity conferred from initial boosters is starting to wane in those who were among the earliest vaccinated. These individuals are generally also among those most at risk, being 65 and older or having underlying health or occupational risk putting them at higher risk of COVID-19 disease, the analyst wrote in a memo to clients.

Rush Cann projects that Moderna will sell and deliver, globally, an estimated 1.177 billion doses of mRNA-1273 in 2022, with 234 million sold in the US. The analyst estimates 2030 sales of $51.4 billion for Moderna.

By Senad Karaahmetovic

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