Why Moderna Stock Just Popped
Key Points
The FDA refused last week to consider Moderna's application to sell a flu vaccine in 2026-2027.
Today, the FDA changed its mind.
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Vaccine specialist Moderna (NASDAQ: MRNA) stock soared 5.5% through 12:55 p.m. ET Wednesday after The Wall Street Journal reported that the U.S. Food and Drug Administration will accept (note: "accept," but not automatically "approve") Moderna's application to sell a new seasonal flu shot good for the 2026-2027 flu season.
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Moderna vs. the flu
The FDA had previously rejected Moderna's application, refusing even to review it after concluding Moderna hadn't done sufficient safety testing. Now, Moderna is promising to do additional testing to confirm it's safe for elderly patients to take -- and it seems that's good enough for the FDA.
Moderna expects the FDA to complete its review by August and, if the vaccine (called mRNA-1010) is approved, it will be ready to hit the market in time for the next flu season. Approval isn't certain, however. FDA Commissioner Marty Makary is quoted saying the FDA is no longer "rubber-stamping" applications.
But if the FDA does approve the vaccine, well, Fortune Business Insights puts the global flu vaccine market at $9.2 billion annually, so this is a big opportunity for Moderna.
Is Moderna stock a buy?
So you can see why investors are excited. Still, while this is good news for Moderna, it doesn't necessarily make Moderna stock a buy.
Despite being valued at $18 billion in market capitalization after today's run-up, Moderna stock hasn't earned a profit since 2022. The company reported $2.8 billion in losses last year, and $2.1 billion in cash burn. Most Wall Street analysts who follow the stock predict it will be 2029 before Moderna turns profitable again -- and 2030 before it generates positive free cash flow.
Seems to me, the best way to play today's news might be to sell into the rally.
Should you buy stock in Moderna right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Moderna. The Motley Fool has a disclosure policy.
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