Moderna shares pop 7% after Cowen upgrades stock, saying it ‘will be a leader’ in RSV vaccines

Moderna shares jumped by nearly 7% on Wednesday after TD Cowen upgraded the stock, saying the company will “be a leader” in the RSV vaccine market. 

TD Cowen also highlighted Moderna’s other vaccine candidates for diseases like the flu, a pipeline that can help the company become “less reliant” on new Covid-19 waves. Shares closed at $147.90 apiece.

“It’s clear that mRNA vaccines could be disruptive to the traditional vaccine market as they can target complex antigens simply and with rapid, cell-free manufacturing that can lead to an approved product in record time,” wrote Cowen analysts led by Tyler Van Buren, upgrading the stock from market perform to outperform. “Moderna’s near-to-mid-term valuation is becoming less reliant on the emergence of new COVID variant epidemic waves, and more so on PCV, RSV, and flu.”

The upgrade comes as Moderna navigates its post-pandemic-era boom driven by its mRNA Covid vaccine. The company became a household name for its messenger RNA technology, which teaches human cells to produce a protein that initiates an immune response against a particular disease. 

Cowen pointed to the company’s potential RSV vaccine, noting that key opinion leaders believe RSV will be a “three-player vaccine market” between Moderna and drugmakers Pfizer and GSK. The three companies are in a race to approve the world’s first vaccine against respiratory syncytial virus, which infects the lungs and respiratory tract and usually causes mild, cold-like symptoms.

While most people recover in a week or two, RSV can be serious, particularly for infants and older adults.

Moderna’s RSV vaccine performed well in clinical trials and was well tolerated by patients, the note said.

Moderna’s RSV vaccines for adults ages 60 and older received Breakthrough Therapy Designation from the Food and Drug Administration in late January. The designation is intended to expedite the development and review of drugs for serious or life-threatening conditions, and was based on positive topline data from Moderna’s phase 3 clinical trial on the vaccine. 

Moderna’s vaccine was 83.7% effective in preventing RSV with two or more symptoms in people ages 60 and older, and 82.4% effective at preventing lower respiratory tract disease with three or more symptoms. No safety concerns were identified during the trial, and the company said it intends to publish the full data set and share results during an upcoming medical conference. 

The Moderna shot’s efficacy is on par with GSK’s: An FDA review of the company’s data found it was around 83% effective at preventing lower respiratory tract disease caused by RSV during its trial. 

But GSK and Pfizer are still one step ahead of Moderna. Earlier this month, the Food and Drug Administration’s independent panel of advisors recommended GSK’s RSV vaccine for adults ages 60 and older, and a shot from Pfizer for that same age group.

Cowen noted that Moderna believes the regulatory support of its competitors’ RSV candidates “should read-through” to its own.