Moderna jumps 9.2% as pipeline progress and flu data fuel rally

Moderna's expanding pipeline beyond Covid vaccines is giving investors a reason to own the stock again after years of uncertainty.

Moderna Inc. shares surged 9.2% on Thursday, making the biotechnology company one of the top S&P 500 performers as investors responded to pipeline updates and encouraging flu vaccine data.

"For the first time in a long time, the company seems like it has something to get excited about," Jim Cramer, host of CNBC's "Mad Money," said. "I recommend waiting for a pullback before you buy. Take your time. I think Moderna's got a bright future though, but it'll take years to get there."

The stock has rallied roughly 20% since Moderna's Science Day last Thursday, when the company presented a detailed roadmap for the next decade highlighting its growing cancer pipeline alongside newer vaccine programs. An FDA advisory committee recently recommended approval of Moderna's experimental flu shot ahead of an Aug. 5 regulatory decision, while the European Commission approved the company's combination Covid and flu vaccine earlier this year.

Moderna has surged nearly 150% this year, making it one of the best-performing stocks in the S&P 500 and one of the few top gainers not tied to the artificial intelligence infrastructure boom. Even so, shares remain well below their pandemic-era record close of $484 in August 2021, as the company has spent years trying to replace the revenue lost as demand for Covid vaccines faded.

Oncology Pipeline Takes Center Stage

Moderna's oncology efforts stood out at the Science Day presentation. The company currently has cancer therapies in mid- and late-stage trials targeting melanoma, non-small cell lung cancer, renal cell carcinoma, and bladder cancer. The most closely watched program is intismeran, an individualized cancer therapy jointly developed with Merck, being studied in combination with Merck's Keytruda as a secondary treatment for melanoma. Results from a late-stage study are expected later this year.

The renewed emphasis on cancer marks an important shift for a company built on messenger RNA technology that proved its value during the pandemic. Moderna's mRNA platform allows for rapid development of personalized cancer vaccines tailored to each patient's tumor mutations — an approach that differs from standard checkpoint inhibitor therapies that work by removing brakes on the immune system rather than directing it to specific targets.

Flu Vaccine Approval Could Open New Revenue Stream

The flu vaccine program represents Moderna's best near-term opportunity to diversify beyond Covid. If the FDA approves the experimental shot by the Aug. 5 PDUFA date, Moderna would enter the estimated $7 billion U.S. flu vaccine market currently dominated by Sanofi, CSL Seqirus, and AstraZeneca. A combination Covid-flu vaccine already approved in Europe could further expand the addressable market.

Moderna's technology platform gives it a potential edge in efficacy over traditional egg-based flu vaccines, which typically show 40% to 60% effectiveness. The mRNA approach allows for faster strain matching and potentially stronger immune responses, though the company has not yet disclosed comparative efficacy data against established shots.

Investor Implications

Moderna shares, trading at roughly 8 times forward sales after this year's rally, still carry a discount to their pandemic-era valuation multiples. The path to profitability hinges on the flu vaccine launch and progress in oncology. Merck, which is co-developing intismeran, stands to benefit from a successful readout as well, while Sanofi and other incumbent flu vaccine makers face a new competitive threat if Moderna's shot gains approval. The market has not fully priced in the oncology pipeline, leaving room for further upside if late-stage data proves positive.

This article is for informational purposes only and does not constitute investment advice.