Moderna thinks about growing up
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
NEW YORK (Reuters Breakingviews) – Stephane Bancel, boss of $168 billion vaccine producer Moderna, has a problem, but it’s a good one. His company’s shares are up 20-fold since the end of 2019, it has joined the S&P 500 Index, and second-quarter sales of $4.4 billion here came from almost nothing a year earlier on the back of Moderna’s messenger RNA jab against Covid-19.
The company has vaccine orders for 2022 and 2023, and variants and booster injections could extend that revenue for longer than most people hope. Still, the challenge is to avoid Moderna shrinking as pandemic demand subsides. In Wednesday’s earnings call here, Bancel talked about a product pipeline that includes a flu jab and mRNA-based therapeutics for a range of diseases.
Moderna – with a $12 billion cash pile that’s rapidly growing – also said it may license other treatments or acquire businesses. Bancel is starting to fill the potential future gap, but Covid-19 vaccine demand will be hard to replicate. That may explain the company’s modest new $1 billion share buyback program. Ramping it up in the future could help keep investors sweet. (By Richard Beales)
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