Delta Variant on the Rise
You may have heard about a key medical panel advising the US government has already called for Covid booster shots for some segments of the population after this first wave of vaccinations.
What’s more, biotech executives are now proposing to use gene-based vaccines to fight the seasonal flu. Before the pandemic, roughly 45% of the US population got flu shots every year. Doubtless, now with greater awareness of the risks, that number will grow.
More people protecting themselves against infectious diseases is great for the world and even better for a biotech leader that pioneered the entire genetic approach that received approval for a Covid vaccine in record time.
Vaccines Aren’t Going Anywhere
I have had seven fully vaccinated friends who have had breakthrough cases, but none of them were sick at all. One didn’t even know she had it until she got a positive result from a routine test.
Needless to say, the vaccine provides excellent protection and it looks like we will be getting more shots over the long haul.
Recently an advisory panel to the CDC came out in tentative support for giving an additional shot of Covid-19 vaccines to people with weakened immune systems.
Of course, that’s a small part of the population. But as the Delta variant continues to spread, it might be a sign of things to come for others, too.
On Monday, the White House said it supports having the Pentagon mandate that most of the nation’s 1.3 million service members get Covid shots.
Indeed, we are starting to see employers require workers to get vaccinated.
From Walmart to Delta Airlines, more and more large companies are mandating vaccinations for their thousands of employees across the country.
A Quick Review of mRNA Vaccines
I want to be clear. The vaccine doesn’t actually affect your body’s genetic code. Your DNA is unaffected.
Instead, these vaccines work using what’s called messenger RNA, or simply mRNA.
In short, when your cells create proteins out of their DNA, they don’t use the DNA directly. Instead, cells transcribe their DNA into RNA, a similar compound. The cell’s protein factories then translate the RNA into proteins, destroying the RNA in the process.
Vaccines based on mRNA use this process to trick cells into creating specific proteins that make the cells look as if they have been infected by something.
However, that is an illusion – your cells are healthy. Your DNA never changes, and the new proteins are destroyed after a short time. Everything is normal except now your immune system knows how to stop infectious proteins from reproducing and infecting cells.
Make no mistake. This is a game changer. Rapidly produced mRNA vaccines can make cells look like they’re infected by the wild viruses we want to fight.
Our Famed BioTech Leader
The main company developing mRNA vaccines, of course, is Moderna Inc. (MRNA). It was Moderna that was first out the door with a test dose of a Covid vaccine, just 63 days after the virus’s genetics were published.
Moderna’s Covid vaccine was famously sponsored by the legendary Dolly Parton who donated millions to the Vanderbilt University Medical Center last April, which worked with Moderna to develop one of the first Covid vaccines authorized in the US. This March, the 75-year-old singer celebrated getting ‘a taste of her own medicine’ by singing an updated version of her iconic hit “Jolene.”
Moderna is also the company behind one of the two widely available mRNA vaccines out there. In fact, it’s the one I got. In the first quarter of 2021 alone, Moderna shipped 102 million doses of the vaccine.
From the Flu to Covid and Beyond
Moderna was founded in Cambridge, MA in 2010 with the goal of commercializing mRNA technology.
And, get this, the company only went public in 2018, just two years before their covid vaccine would make them a household name. I see plenty of upside ahead for them, but the window to invest before their big break, and the multiplying value that went with it, was very small.
That’s why I want to let you know that you have a chance to invest in another disruptive innovator before it even goes public, a company that is projected to reach $1 billion in value, and do for household game night what Netflix did for television.
But as for today, Moderna is still hard at work developing 24 vaccine candidates in addition to the Covid one it already makes.
This includes an annual flu vaccine booster for 2023 and beyond. There’s also a vaccine for the RSV virus that can seriously harm children and the elderly, as well as other infectious diseases like HIV.
Furthermore, the firm is actively working on 13 mRNA treatments. These include five cancer treatments and two autoimmune therapies with several already in clinical trials.
Add it all up and you can see Moderna is far from a one-hit wonder. It has a robust pipeline of new products that can ring up sales for years.
Turning mRNA Into Gold
It’s true that earnings growth over the last three years has been weak as the firm invested in R&D. But in the June quarter, the firm earned $6.46 per share compared with a year-ago loss and came on the back of a 6,400% sales increase.
Moderna also raised forecasts for the year. For 2022, it has already signed contracts to deliver $12 billion worth of Covid vaccines. Not only that, clients have options to purchase more doses worth roughly $8 billion.
To be conservative, let’s project that per-share profits average 25%. At that rate, earnings will double in about 33 months.
In other words, Moderna is not just a play on Covid or the flu. It’s a great way to get wealthy on a completely new generation of biotech treatments.
Cheers and good investing,
Michael A. Robinson