Is Investing in Moderna Stock (NASDAQ:MRNA) Simply Dead Money?
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Moderna (MRNA) stock has fallen 71% over the last six months. While there’s still potential for near-term revenue tailwinds in the form of emerging infectious diseases, I’m concerned that the company may never deliver on its pipeline potential. One reason for this is the company’s extraordinary cash burn, and another is that these formative loss-making years may be negatively impacted by changing federal policy with a vaccine skeptic taking to the Department of Health and Human Services. As much as I like to take a positive opinion on Moderna, I’m bearish for now, as investing in it could be dead money.
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What’s Going On with Moderna’s Stock Price?
I can understand why many investors will see Moderna’s fallen share price as an opportunity. After all, there hasn’t been a great deal of change with regard to business performance in 2024 despite the huge fluctuations in the share price. Earlier this year, the stock surged due to renewed concerns about infectious diseases, particularly as new COVID-19 variants emerged, RSV cases increased, and experts became increasingly concerned about bird flu.
In fact, Moderna was given $176 million in July to work on a bird flu vaccine in case there is ever a human pandemic. The stock actually pushed above $160 as a result. That’s four times higher than the price at the time of writing. Nevertheless, there are good reasons for the stock’s downturn, including lower-than-expected vaccine sales, increased competition in the vaccine market, and concerns about the company’s ability to execute its sales and R&D strategies.
Moderna’s recent announcement of revised financial forecasts, including a two-year delay in reaching profitability and significant R&D cuts, further rattled investors who are now wondering whether they will ever see their investments grow. Moderna now faces challenges in rebuilding investor confidence and demonstrating its ability to diversify beyond COVID-19 vaccines. That could be increasingly challenging with possible changes to federal policy, which is why I have a negative outlook on the stock.
MAHA Could Pose Challenges for Moderna
The MAHA (Make America Healthy Again) movement also represents a potential threat to Moderna’s prospects. Vaccine stocks fell after Robert F. Kennedy Jr. was nominated by President-elect Trump to become the Secretary of Health and Human Services. That’s not entirely surprising given Kennedy’s stance on vaccines — among other things, he once claimed that “autism comes from vaccines.”