Moderna Shares Surge After Recording Positive Phase 4 Prelim Data on COVID-19 Drug

US biotech firm Moderna (Nasdaq: MRNA) shares rose by over 4% on Tuesday to close at $24.84 (£18.2) despite US equity indexes slipping from their record high ahead of the US Federal Reserve's decision on interest rates. The Federal Open Market Committee is expected to make the announcement today.

The primary reason Moderna shares gained yesterday was its announcement of positive results for the newest formula of Spikewax to help prevent COVID-19.

Moderna revealed that preliminary phase 4 clinical trial data for the 2025-26 formula of Spikevax, designed to target the LP.8.1 variant of SARS-CoV-2 to prevent COVID-19, showed over an 8-fold increase, on average, in neutralising antibodies against the variant in individuals aged 12 through 64 years with at least one underlying medical condition that puts them at high risk of severe outcomes from the disease. There were no new safety concerns identified, and the safety profile was consistent with earlier studies.

According to the company, the findings indicate that the company's updated Covid vaccine could be a "strong match" to the top circulating strains in the US today. Spikevax also received approval from regulators in Canada, Europe, Japan, Mexico, and Switzerland.

The stock price has tumbled from record highs of over $400 (£293.02) per share in 2021 to $24.84 as of Tuesday's close. Experts attribute the decline to lower-than-expected revenue outlooks and a projected drop in vaccine demand.

The stock also took a hit about a month ago when it lowered the top end of its full-year 2025 revenue guidance due to a delay in vaccine deliveries to the UK. Moderna now expects 2025 revenue of $1.5 billion (£1.09 billion) to $2.2 billion (£1.61 billion), down $300 million (£219.7 million) from the top end of the range. The company is also actively engaged in cost-cutting initiatives after Q2 earnings results. It plans a 43% year-over-year reduction in research and development costs and seeks to identify an additional $1 billion (£733 million) in potential cuts over the next years.

The 18 Wall Street analysts polled by TipRanks had an average 12-month price target of $44.23 (£32.42) per share. Most of the analysts had a hold rating on the stock, with only two of them having a buy rating.

On Tuesday, UBS reiterated its buy rating on the stock with a price target of $70 (£51.31) per share, implying a 181% upside from current trading levels. According to Investing.com, the brokerage's decision comes after a recent call with a Washington DC-based biopharma lobbyist about regulatory developments around COVID-19 vaccines.

In a research note, UBS highlighted the lobbyist's view that major changes to COVID-19 vaccine access are unlikely, noting signs of support from US President Donald Trump, who reportedly views Operation Warp Speed as an accomplishment from his first term.

Furthermore, UBS believes that the upcoming Senate hearing on the termination of former CDC director Susan Monarez and the Advisory Committee on Immunization Practices meeting this month could potentially impact the sector.

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