Opinion: It's Time to Load Up on This Biotech Giant After Its 80% Crash

Key Points

• This stock used to be a highflyer but has struggled in recent years as demand waned for its flagship product.

• A new era of growth could be right around the corner, offering investors a big opportunity right now.

• 10 stocks we like better than Moderna ›

It's difficult to get motivated about buying a stock that's plummeted or a company that seems to be out of favor with the general investment community. But if that company has bright long-term prospects, it's a great idea to stop and take a closer look. Even if a rebound doesn't happen overnight, eventually, elements like demand for that company's products or services and rising earnings should support stock performance.

Meanwhile, if you buy the shares while they're down, you will have gotten in on the stock for a bargain -- and can maximize your potential gains.

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Today, one struggling stock in particular offers you the chance to invest for a song and possibly win big over time. This biotech giant sells what used to be one of the world's most sought-out pharma products and today has a full late-stage pipeline, signaling many possible revenue drivers ahead. In my opinion, it's time to load up on this stock after its 80% crash. Let's find out why.

Image source: Getty Images.

Maker of a top-selling product

The company I'm talking about is Moderna (NASDAQ: MRNA), maker of one of the world's top selling coronavirus vaccines -- at its peak back in 2022, the vaccine generated a mind-blowing $18 billion in annual revenue. A star of early pandemic days, Moderna not only won in the area of earnings but also in the area of stock performance. Moderna stock soared more than 2,000% from the start of 2020 to its peak in August of 2021.

But the Moderna story dimmed in recent years as demand for coronavirus vaccines declined, and as a result, earnings sank. On top of this, investors grew to think of Moderna as a "coronavirus vaccine stock," and therefore considered that this growth story was over as of later pandemic days. Though Moderna has a broad pipeline of candidates across therapeutic areas, the company still is having trouble renewing its identity.

This could represent opportunity for savvy long-term investors. Moderna has dropped 80% over the past three years as investors focused on declining coronavirus vaccine sales, but they've been ignoring the new growth opportunity ahead. Moderna aims to launch as many as 10 new products over the coming three years, a move that could be transformational for the company. That's because these potential products span various treatment areas, making Moderna less dependent on one specialty, and would offer the company several sources of revenue.

Expanding the product portfolio

These potential approvals include a personalized cancer vaccine, as well as vaccines for cytomegalovirus (CMV), Norovirus, and more. Through 2026, Moderna aims to build a portfolio of about five respiratory vaccines, and from 2026 through 2028 expand by delivering approvals in oncology, rare diseases, and latent viruses.

And by 2028, Moderna expects its cost cutting and growth efforts will result in the company breaking even on an operating cash cost basis and delivering $6 billion in revenue. Now, I know that some investors, comparing this to Moderna's coronavirus vaccine revenue of a few years ago may be disappointed. But it's important to remember that revenue from a pandemic-related product shouldn't be compared to revenue of therapeutics in ordinary times. Pandemics are unusual moments, so they don't make a fair point of comparison.

Instead, it's a good idea to look at Moderna's 2028 goals as a new starting point, and ask ourselves where the company will go from there. From that perspective, Moderna once again looks like a growth company, as Moderna's late-stage programs address areas with huge total addressable markets. For example, CMV and Norovirus vaccines would face limited-to-no competition in markets that each could be as big as $5 billion. And the oncology market, one Moderna aims to address with several candidates in development -- is a multibillion-dollar one.

So, even if Moderna makes it half of the way to its product launch goal over three years, the growth picture could look very positive. That's why, in my opinion, now is a great time to load up on this biotech giant while it's down -- and then sit back and wait for the new era of growth to start powering the stock higher.

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

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