In an April 19 research note, ROTH Capital Partners analyst Yasmeen Rahimi reported that the Biomedical Advanced Research and Development Authority (BARDA) awarded Moderna Inc. (MRNA:NASDAQ) $483 million in funding, in part for development of its COVID-19 vaccine, mRNA-1273.
Rahimi discussed how Massachusetts-based Moderna will use the funds, which will be provided in tranches to reach certain milestones.
Half of the $483 million award will be used to help cover clinical development costs of mRNA-1273, from trial operations to the filing of a biologics license application.
Currently, the vaccine is in Phase 1 in the clinic. Recently, the biopharma decided to add to the study a cohort of patients aged 51 years and up, which "will be key for demonstrating mRNA-1273's safety and immunogenicity in this vulnerable population," Rahimi noted.
The analyst explained that for mRNA-1273 to advance to Phase 2, the results from Phase 1 must be optimal. The data must demonstrate the vaccine is safe and tolerable. They must show that the vaccine produced a sufficient number of neutralizing antibodies, crucial for stopping viral replication and proving the vaccine's method of action. Phase 1 safety data from the group aged 18–55 years are expected in spring followed by immunogenicity results, likely in mid-July or early August.
Rahimi relayed that as soon as safety data are available, Moderna plans to launch a Phase 2 study of mRNA-1273 rather than wait for the remaining results to become available, according to CEO Stéphane Bancel.
"Pending favorable safety data from Phase 1, we point out that a potential Phase 2 study would enroll hundreds of patients, and that the BARDA funding could potentially allow Moderna to pursue trials in patient populations who are at greater risk, such as patients who have underlying comorbidities, those who are overweight and patients with cancer," commented Rahimi.
Moderna will spend the second half of the $483 million BARDA funding on the engineering and optimization work required to scale up the manufacturing of its messenger RNA (mRNA).
"With the current focus on SARS-CoV-2 and mRNA-1273, Moderna was now able to present BARDA its strategic plans (amount, time and people) of how to be ready for commercial launch," wrote Rahimi. "This preparation was likely helpful in expediting discussions with BARDA and awarding of the grant."
Also regarding mRNA production, Ginkgo Bioworks, a company with expertise in organism biology and genetically engineering bacteria to replace certain industrial applications, is helping Moderna optimize certain parts of the process.
Rahimi, who is closely tracking COVID-19 data, highlighted that April 18 was the first day in five on which the daily death tally, 1,867, was less than that predicted by Dr. Christopher Murray's model, 2,194.
ROTH has a Buy rating on Moderna.
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Disclosures from ROTH Capital Partners, Moderna Inc., Company Note, April 19, 2020
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Within the last twelve months, ROTH has received compensation for investment banking services from Moderna, Inc.
ROTH makes a market in shares of Moderna, Inc. and as such, buys and sells from customers on a principal basis.
Within the last twelve months, ROTH has managed or co-managed a public offering for Moderna, Inc.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
