Why Moderna Stock Is On Fire Today | The Motley Fool

What happened

Shares of messenger RNA (mRNA) vaccine and therapy specialist Moderna (MRNA 0.57%) were up by a stately 7.2% as of 12:30 p.m. ET Wednesday as investors responded positively to comments made by CEO Stéphane Bancel.

Speaking Wednesday to reporters in Toyko, Bancel said that Moderna is in talks with the Chinese government about providing vaccines to the country. He declined to say whether or not the biotech has formally applied for approval for its COVID-19 vaccine in China. 

So what

Moderna's stock is badly in need of positive catalysts. The biotech's shares have tumbled by 44% year to date over concerns that sales of its COVID-19 vaccine, Spikevax, may start to decline in a big way soon. 

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NASDAQ: MRNA

Moderna Inc.Today's Change(-0.57%) $-0.17Current Price$29.46

Key Data Points

Market Cap$12BDay's Range$29.40 - $30.4352wk Range$22.28 - $48.92Volume12MAvg Vol11MGross Margin38.93%

The key issue at play is the lucrative U.S. vaccine market. U.S. health authorities are no longer recommending new booster shots every couple of months, which could deal a blow to the top lines of coronavirus vaccine makers. What's more, Congress has been unable to pass new funding for U.S. coronavirus vaccination and testing programs. If health care providers and individuals have to pay for their own vaccines in 2023 and beyond, sales may slow even further.

A deal to supply China with Spikevax, though, could alter the biotech's near-term outlook in a significant way. China, which has been pursuing a "zero COVID" policy, has been struggling to curtail new outbreaks. That's likely due in part to the weakness of its current slate of coronavirus vaccines. Moderna's vaccine could thus play a critical role in China's coronavirus response -- and quite possibly generate billions in sales for the biotech in the process.   

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Now what

Is Moderna's stock a buy on this news? While there is a clear need for more-effective vaccines in China, Moderna said that a vaccine supply deal with the country isn't a sure thing. So until the ink is dry on an agreement, investors may want to hang tight.