Business Strategy and Outlook| Karen Andersen, CFA |
Moderna's mRNA technology has gained rapid validation as sales of its COVID-19 vaccine soared in 2021, but we think the firm has yet to secure a narrow economic moat around its business, largely due to uncertainties tied to an evolving virus and the changing competitive landscape for innovative vaccines.
In a record-breaking span of just 11 months, Moderna created, developed, manufactured, and got regulatory authorization for mRNA-1273, a two-dose COVID-19 vaccine that is one of the first two mRNA vaccines ever authorized (alongside Pfizer/BioNTech's BNT162b2). The pandemic accelerated Moderna's evolution into a commercial-stage biotech, and we expect that the firm's ramp-up in manufacturing and clinical know-how will pave the way for faster timelines for additional programs. Moderna's mRNA platform, involving rapid design and similar manufacturing across programs, allows the company to pursue multiple programs in parallel. Moderna also retains full rights to most of its programs, although key partnerships with Merck and AstraZeneca help support its efforts in oncology.
Moderna reported $17.7 billion in COVID-19 vaccine sales in 2021, and we model nearly $22 billion in sales in 2022 as demand for first doses begins to decline but demand for boosters expands. We see potential for sustained revenue in the mid-single-digit billions annually if higher-risk populations continue to receive annual vaccines beyond the pandemic, although there is high uncertainty around the number of long-term competitors (including new mRNA players) and pricing.
Moderna's most advanced program outside COVID-19 is for cytomegalovirus, a leading cause of birth defects, but several other vaccines are advancing into late-stage trials, including respiratory virus vaccines for RSV and influenza. We see each of these as more than $1 billion annual sales opportunities. Moderna is also pursuing a broad spectrum of other therapeutic indications, from cancer to cardiology to rare diseases, with an expanding early-stage development pipeline.