Messenger RNA COVID vaccine pioneer Moderna (MRNA) reported the firm's third quarter earnings on Thursday morning. Taken at face volume, the numbers are stunning.
Relative to expectations? Not so much.
Moderna posted GAAP EPS of $7.70 versus a loss of $0.59 per share for Q3 2020. This result also fell more than $1.40 short of consensus view. Moderna generated $4.97B in revenue for the quarter, driven by sales of mRNA-1273, the firm's COVID jab that totaled $4.81B. The balance came from grants and collaboration fees. This revenue total is good for year over year growth of 3,047%, just well short of Wall Street. Expectations had been for more than $6.25B.
Under the Hood
Moderna now has 37 programs in development, with 21 of them currently in ongoing clinical studies. Interim data from a Phase 2/3 KidCOVE study of MRNA-1273 in children aged six to 12 years shows efficacy of 100% two weeks after the first dose. A Phase 1 study of mRNA-1283 is fully enrolled. This, if successful, will be a refrigerator stable version of the firm's original COVID vaccine.
The firm's quadrivalent seasonal influenza vaccine candidate (mRNA-1345) is now fully enrolled, with preparations underway to move into Phase 2 testing. The firm is also working on a potential combination COVID/Influenza vaccine (mRNA-1073) candidate. Moderna also has four variant specific COVID vaccine candidates in development with three of the four already in Phase 2/3 clinical trials.
Beyond COVID and the Flu, Moderna is working on potential messenger RNA solutions indicated to address Epstein-Barr virus, Cytomegalovirus (CMV), Zika, and HIV as well as several other viral maladies.
Guidance & Balance Sheet
For FY 2021, Moderna expects to have delivered between 700M and 800M doses of its mRNA-1273 COVID vaccine, realizing sales of $15B to $18B. This is below the firm's indicated dose capacity of 800M to 1B doses that firm mentioned three months ago when the firm also projected product sales of $20B. The firm additionally says that it now has $17B worth of signed orders for 2022, and is expecting sales to land in the $17B to $22B range.
Moderna after a whale of a nine months, now stands with a net cash balance (cash, equivalents, investments) of $15.348B, almost tripling since New Year's Eve. This comprises the bulk of corporate assets that total $20.923B. Assets nearly double total liabilities sans equity. The gist of what must be one of the simplest balance sheets I have ever seen is that the firm is both flush with cash, and in quite sound shape.
This is probably why Moderna has authorized a $1B share repurchase program with a two year horizon.
Obviously, a dip like today's (-16%) on top of an already weak chart has all of our indicators crying "uncle." I see the gap created this morning. I know that gaps don't always fill but they usually do. It might take a second "home run" solution to a desperate problem to get this stock there. Now, we pray that the need for such advanced vaccinations abates from here, but wouldn't it be nice if Moderna could solve HIV or the Flu?
What this chart tells me is that buying some Moderna stock today could be akin to trying to catch a falling knife. However, a 61.8% Fibonacci retracement of the stock's entire 2021 move would land the shares at $251.27, while the stock's 200 day SMA currently stands at $251.78.
That smells like algo bait to me. I made a lot of money in this name from 2020 into 2021. If I were to venture back into this name, or if I were short the shares, which I am not... that would be my target. A trader could get paid close to $14 to take on equity risk at the $250 level expiring in January (translation: sell or write a $250 MRNA January put). This of course would be risky but would reduce net basis if the shares were actually put to that trader to $237. Same trader could purchase $240 MRNA January puts for a little more than $10 in order to control the risk. Now the payout is only $3 and change, but the trader can't lose his shirt.
Just an idea. The conservative investor simply waits for the low $250's.