Expert Investor
Author: Mauricio Carrillo
Senior Reporter
Mauricio Carrillo

Moderna to Cash in COVID-19 Vaccine Prospects; Expects to Raise 1.34B

The news hit the wires on Monday, and Bob Langer, a professor at the Massachusetts Institute of Technology (MIT), saw how its early investment and work in Moderna Therapeutics rose to the sky. Now, his stock options are worth more than $1 billion.

The reason? Biotech company Moderna reported positive data on an early-stage coronavirus vaccine trial on Monday. According to the press release, the phase 1 trial showed positive signs that the procedure can create an immune system response against the virus in humans.

The phase, led by the National Institute of Allergy and Infectious Diseases, demonstrated that the vaccine candidate was able to produce COVID-19 antibodies in all 45 participants.

ivided into three groups, each participant got two 25, 100, or 250 micrograms doses separated by 28 days. After two weeks following the second dose, subjects in the 25 microgram group experienced levels of binding antibodies seen in people who recovered from the disease.

With today's positive interim Phase 1 data and the positive data in the mouse challenge model, the Moderna team continues to focus on moving as fast as safely possible to start our pivotal Phase 3 study in July and, if successful, file a BLA.

Said Stéphane Bancel, Chief Executive Officer at Moderna in the press note.

We are investing to scale up manufacturing so we can maximize the number of doses we can produce to help protect as many people as we can from SARS-CoV-2.

Moderna Expects to Raise $1.34 Billion in New Shares Offering

Based in Cambridge, Massachusetts, Moderna Therapeutics announced a public offering of $1.25 billion in shares of common stock, plus an "a 30-day option to purchase up to an additional $187.5 million in shares of common stock in connection with the public offering," according to a separate press release.

Moderna's public offering leitmotiv goes in line to secure the production and distribution of its new COVID-19 vaccine candidate once it has completed the regulatory process. The company also said that they would use the remaining cash to fund research in existing and new therapeutic areas.

Moderna expects to use the net proceeds of the offering to fund working capital needs related to the manufacturing of mRNA-1273, its vaccine candidate against the novel coronavirus (SARS-CoV-2), for distribution in the United States and outside the United States, assuming necessary regulatory approvals are obtained, and the remainder, if any, to fund clinical development and drug discovery in existing and new therapeutic areas; to fund further development of its mRNA technology platform and the creation of new modalities; or to fund working capital and other general corporate purposes.

With Morgan Stanley acting as sole book running manager of the move, Moderna is offering around 20 million new shares at the starting price of $76.00 per unit. The company expects to raise approximately $1.34 billion.

MRNA Shares Analysis

Moderna Daily Chart

Shares of Moderna rallied following the news about the good COVID-19 vaccine candidate news on Monday. The unit closed the day at $80.00, which was around 20% up in a single day. Interesting that the new public offering will start at $76.00 per unit.

On Tuesday, MRNA is trading negative as a mix of profit taking after the rally and a reaction for the public offering. Technically, the share broke above a significant resistance at $68.00 and it went well above that to reach an all-time high of $87.00.

Naturally, the share will experience some profit taking but the fundamental prospects are good, especially after the company has raised the attention of its pioneering practices in therapeutic research.

Besides, favorable technical conditions should maintain the uptrend in the share intact. MACD is bullish, however, Momentum is fading slightly.

Today, BMO Capital analyst George Farmer raised Moderna's target price from $83 to $112 citing the COVID-19 vaccine trial. "The COVID-19 vaccine has 'meaningfully' reduced clinical risk and should continue to generate investor interest in the program."

Also, Goldman Sachs revised up its 12-month price target for Moderna from $63 to $105. Goldman Sachs analyst Salveen Richter raised the study's probability of success to 75% from 70% following the positive results.

Meet The Author
Mauricio Carrillo
Mauricio Carrillo
Senior Reporter

Mauricio is a newer member of the team and a very welcome addition. He is a financial journalist and trader with over ten years of experience in stocks, Forex, commodities, and cryptocurrencies. This experience means he has an excellent understanding of the markets and current events.

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