Moderna Inc. (NASDAQ: MRNA) shares dipped on Wednesday after the company announced a new deal with the U.S. government for its COVID-19 vaccine. Although shares pulled back, this appears be a case of “sell the news,” because this is ultimately a net positive for the company.
Moderna announced that the U.S. government has secured 100 million doses of mRNA-1273 as part of the U.S. government’s goal of securing early access to safe and effective COVID-19 vaccines for the American people.
As a result, the company was awarded up to $1.525 billion for the manufacturing and delivery of these 100 million vaccines. This award includes incentive payments for the timely delivery of the product. The previous award was up to $955 million from the Biomedical Advanced Research and Development Authority (BARDA) for the development of mRNA-1273 to licensure.
This announcement brings the U.S. government commitments for early access to the vaccine up to $2.48 billion.
Under the terms of the agreement, the U.S. government, as a part of Operation Warp Speed, also will have the option to purchase up to an additional 400 million doses of mRNA-1273 from Moderna.
One key part of this is that the U.S. government has announced that consistent with its commitment to free access to COVID-19 vaccines, Americans will receive mRNA-1273 at no cost for the vaccine itself. However, there may be costs associated with administering the vaccine.
Management also was quick to note that it is advancing the clinical development of mRNA-1273, with the ongoing Phase 3 study being conducted in collaboration with National Institute of Allergy and Infectious Diseases and BARDA. At the same time, Moderna is scaling up its manufacturing capability with its strategic partners.
Note that Moderna has posted gains of roughly 252% so far in 2020. Investors looking to realize gains could be pushing the stock down on Wednesday.
Moderna stock was last seen down about 1%, at $68.31 in a 52-week range of $12.47 to $95.21. The consensus price target is $93.77.
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.