Meet the Biotech Stock That's Trouncing Lilly, Merck, and Pfizer in 2026

Eli Lilly (NYSE: LLY), Merck (NYSE: MRK), and Pfizer (NYSE: PFE) are among the largest pharmaceutical companies in the world. The first focuses primarily on developing medicines for diabetes and weight management -- areas where it is a leader -- while the other two have a strong presence in oncology. Merck has been the best performer among this trio this year, but even it has been left in the dust by a smaller biotech that has been flying high since 2026 began: Moderna (NASDAQ: MRNA). Shares of this vaccine specialist are up 43% to date, and there are good reasons to think the company has plenty of upside left.

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Why Moderna's shares have soared

Moderna became famous after it developed one of the leading coronavirus vaccines on the market. But the company's COVID-related work is no longer a major growth driver. Investors have instead been paying attention to the biotech's pipeline progress. And on that front, Moderna's recent efforts have been highly encouraging. For instance, the company is awaiting approval for a flu vaccine after submitting regulatory applications in the U.S., Europe, Australia, and Canada earlier this year.

Moderna hopes to carve out a niche in this space where there is a need for newer, better options. Despite there being plenty of flu vaccines, they typically aren't very effective (efficacy tends to fall between 40% and 60% during peak flu seasons, but it can be even lower). That leaves patients, particularly those who are most at risk, including seniors, vulnerable to severe cases of the disease, hospitalization, and sometimes death.

Moderna's mRNA-1010 performed better than traditional vaccines in older adults in studies, so the company could find tremendous success in this market, provided its candidate earns approval. Progress with this program is one of the reasons Moderna has performed well this year. Elsewhere, the company continues to make headway with what might be its most promising pipeline product: mRNA-4157, an investigational personalized therapeutic cancer vaccine. Moderna is developing this medicine in collaboration with Merck.

In a phase 2 study, mRNA-4157 significantly reduced the risk of recurrence or death in patients with advanced melanoma when combined with Merck's Keytruda, versus Keytruda alone. mRNA-4157 is undergoing several phase 2 and phase 3 studies. It is looking to tap into a large market, and analysts estimate that it could generate billions in sales. Moderna's work with mRNA-4157 is incredibly important to its medium-term outlook. Investors should pay close attention to developments in that department.

Is the stock still a buy?

Moderna is unquestionably an innovative vaccine company. Its mRNA platform has strong potential, partly because vaccines of this kind are faster to develop than traditional ones, which often rely on growing live viruses in bulk, weakening them, and then introducing them into patients' bodies to teach their immune systems how to respond. For mRNA vaccines, scientists need to know the target pathogen's genetic sequence and design an mRNA molecule accordingly, which, once injected into the patient, initiates a series of biological processes that lead to immunization.

This advantage is one of the reasons why mRNA vaccines dominated much of the coronavirus market. And here's the good news: Moderna has a pipeline full of them across many therapeutic areas. The company's phase 3 pipeline, including products such as mRNA-4157 and mRNA-1010, should yield new approvals soon and help it generate solid revenue and earnings. However, there are significant risks to consider. After its rally this year, Moderna has a market cap of $18 billion (as of writing).

That's quite a lot for a company that currently generates meager revenue ($389 million in the first quarter) and is unprofitable. While its mRNA platform is indeed promising, some of the success of its late-stage candidates seems already baked into the stock price. Clinical or regulatory setbacks will sink Moderna's shares. In other words, there could be plenty of volatility ahead. Investors comfortable with that may consider initiating a small position in the stock. Others will want to stay away and look for more established biotech stocks.

Prosper Junior Bakiny has positions in Eli Lilly. The Motley Fool has positions in and recommends Eli Lilly, Merck, Moderna, and Pfizer. The Motley Fool has a disclosure policy.