Where Will Moderna Be in 3 Years?

As Moderna (NASDAQ: MRNA) looks to shore up its business in the wake of its declining coronavirus vaccine sales, it's natural for investors to wonder about where the biotech will go in the near future.

By early 2028, Moderna will be firmly within its next phase of life, potentially operating more like a traditional pharmaceutical business than like an up-and-coming biotech with a lot to prove about the value of its platform and its general competency in drug development.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

The question is, will that phase be better than the one it just exited? Let's investigate what it's working on and the financial impacts that work could have for investors.

The transition continues

Before beginning the discussion of where this company is going, let's set expectations appropriately. Moderna won't be revisiting its all-time highs for revenue or earnings in the next three years. The odds that it will experience another idiosyncratic gold rush like there was for its coronavirus vaccine are close to zero.

But there's still an investment thesis for this stock that's grounded in what it's planning to do, so long as investors are willing to be patient. Management's plans for the next three years entail a total of 10 product launches and, in 2027, reducing the annual sum it invests in research and development by $1.1 billion.

Today, Moderna's trailing-12-month revenue is just over $5 billion, and it reported operating losses of $2.7 billion. That means the pressure is on for it to produce in-demand medicines precisely when its financial resources are becoming more constrained.

The products with the biggest earning potential that could be approved are its combination shot for influenza and COVID, its influenza vaccine, and its next-generation COVID vaccine. Under the right conditions, each of those programs could become a blockbuster drug generating more than $1 billion in annual sales revenue, though it's key to recognize that revenue from sales is not the only way that shareholders could benefit.

For instance, the Department of Health and Human Services (HHS) announced on Jan. 17 that it will be providing $590 million to the company to advance its pandemic influenza vaccine program, which could enter late-stage trials later this year. Getting more grants of that type is highly likely in the future, and that possibility somewhat reduces the risk associated with initiating or advancing additional pipeline programs for infectious diseases as a result.

Separately, Moderna's drugs with somewhat more niche applications could drive the stock's price higher even in advance of their approval.

In particular, its seven oncology drugs in mid-to-late-stage clinical trials, especially the six of those that are individualized
 neoantigen therapies (INTs), are notable for their mechanism of action. INTs use the genetic sequence of a patient's tumor cells to train their immune system to fight against their cancer much more effectively, especially with the help of other anticancer medicines.

Version 1.0 of these medicines could be a major advancement in treating cancer, even if it doesn't immediately lead to a large inflow of revenue due to the relatively small size of the oncology markets being targeted. Still, there is zero chance that Moderna will stop if it can successfully commercialize any of its candidates.

So it'll be a great sign for its future if the biotech can get one of those programs out the door, and getting late-stage updates on how they're proceeding will be a green flag as well, if it happens.

The longer the time horizon, the better this looks

In a nutshell, there's a solid chance that Moderna will be gearing up for its next major push of growth by the time early 2028 rolls around, but it probably won't be realizing much of the growth from its newly launched programs between now and then until shortly thereafter.

Therefore, if you're going to make an investment in this company, be ready to hold it for at least five years or more, and be aware that there isn't a pressing deadline that demands buying the stock today or even within the next couple of quarters.

At the same time, be aware that any of its clinical programs could fail to produce a marketable drug, and that any such failure would damage the stock's price. Multiple failures within the same segment could easily create multiplicative damage.

Moderna will probably be an important part of the biopharma landscape for quite some time, especially if its advanced therapeutic vaccines deliver on their potential. Within the next three years, it'll need to prove that assumption, and so far it's on track.

Should you invest $1,000 in Moderna right now?

Before you buy stock in Moderna, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Moderna wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $843,960!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of January 21, 2025

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool recommends Moderna. The Motley Fool has a disclosure policy.