Topline
Shares of biotech company Moderna slipped more than 7% in premarket on Wednesday after Citi downgraded the stock to “sell,” claiming an impressive rally around positive Phase 3 cancer vaccine results have given it an “unjustifiable” valuation.
The logo for vaccine manufacturer Moderna.
NurPhoto via Getty Images
Key Facts
Citigroup analyst Geoff Meacham downgraded Moderna from a neutral position and raised Citi’s price target on the stock from $60 to $80, which sits about 60% below Tuesday’s closing price of $203.46.
Moderna shares have risen more than 220% since mid August, when the company announced positive trial results for a personalized cancer vaccine in high-risk melanoma (called intismeran) it developed with Merck.
To justify the current share price, Moderna would need to generate about $13 billion in annual oncology revenue but Citi’s financial model estimates it will make a fraction of that figure, making the current share price almost seven times higher than what realistic commercial cash flows suggest.
The downgrade also comes two days after a Delaware federal court denied Moderna’s motion to dismiss key claims in an ongoing patent suit over the core tech used in its mRNA platform.
This is a developing story and will be updated.
Leave a comment