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.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
