Moderna Tumbles on Rating Cut at SVB Leerink

Moderna Tumbles on Rating Cut at SVB Leerink

Moderna  (MRNA) – Get Report tumbled Tuesday after an analyst at SVB Leerink cut his rating on the biotech company to underperform from market perform and slashed his price target to $41 from $58 over concerns about fierce competition for a coronavirus vaccine.

Shares of the Cambridge, Mass.-based company were down 11.2% to $55.74.

“As we are in the midst of a global buildout of capacity analogous to a Manhattan project for vaccines, we see excess capacity, high competitive intensity, and limited pricing power as likely long-term structural features of vaccine end-markets, presenting secular challenges to a sub-scale player such as MRNA,” Leerink analyst Mani Foroohar said in a note to clients.

Foroohar said MRNA-1273, the company’s vaccine candidate, “represents the bulk of the company’s revenue opportunity and our valuation, making it the key driver of share performance.”

The analyst said he ascribes a high probability of approval to MRNA-1273, given the permissive regulatory environment surrounding  vaccine candidates, and expects meaningful revenues, with a substantial early bolus of patients, but he doesn’t see a clear path to above-consensus sales in the first quarters of launch.

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