Moderna Snaps Two-Day Losing Streak Ahead of Booster Update

(Bloomberg) — Moderna Inc. and BioNTech SE rose, ending a two-day plunge, ahead of an expected update from U.S. regulators authorizing Covid-19 booster shots.

Moderna’s stock rebounded Thursday, closing 1.6% higher at $391.42 in New York after the vaccine maker and its peer BioNTech lost $60 billion in value over the prior two sessions. BioNTech jumped 4.1%, while its partner Pfizer Inc. gained 2%.

Anticipation is building ahead of an expected update from U.S. regulators on getting a third jab for people with compromised immune systems, many Moderna bulls expect there will eventually be an even broader edict for boosters. The Food and Drug Administration is expected to update authorizations on the inoculations from BioNTech and its partner Pfizer Inc. as well as Moderna, as soon as Thursday.

“Boosters forever seems to be the mantra of the bulls,” Geoff Meacham, an analyst at Bank of America Corp., said in a phone interview, adding that Moderna’s valuation assumes every product in its pipeline works.

Moderna’s new study showed a third vaccine shot significantly raised antibody levels against the coronavirus in transplant patients, bolstering the biotechnology company’s case for boosters, at least in those patients.

Boosters may be needed, but likely not on an annual basis, said Meacham who has a PhD in molecular biology. For Moderna, he expects that it might take a couple of quarters of declining sales for the stock to rerate. In a report earlier this week, he called out the stock’s valuation as moving “from unreasonable to ridiculous.”

With its market size briefly breaching $200 billion on Monday, the Cambridge, Massachusetts-based company’s valuation has been drawing increasing skepticism from Wall Street deeming it unsustainable. Moderna trades at nearly three times the value of its Covid shot, Bloomberg Intelligence’s John Murphy said. That leaves little room for any missteps in the company’s execution, which could cause the stock to plummet.

(Updates with closing prices and adds BofA commentary in the third paragraph.)

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