Why Moderna Stock Crashed Today
What happened
Shares of Moderna (NASDAQ: MRNA) plunged 15.6% on Wednesday after Europe's drug regulator provided a COVID-19 vaccine-safety update.
So what
The European Medicines Agency (EMA) is studying three new conditions reported by a small number of people who received mRNA COVID-19 vaccines provided by Moderna and Pfizer.
These conditions include:
- Erythema multiforme, an allergic skin reaction.
- Glomerulonephritis, or kidney inflammation.
- Nephrotic syndrome, a renal disorder.
The EMA is assessing whether these conditions could be possible side effects of the vaccines.
Image source: Getty Images.
The information was provided as part of ongoing safety updates the EMA regularly delivers to the public. The EMA did not recommend any changes to the product information displayed on the labels of these vaccines.
Now what
Analysts had already raised concerns that Moderna's stock price had risen too far, too fast. Bank of America analyst Geoff Meacham said on Tuesday that Moderna's nearly $200 billion market valuation was "ridiculous" and "unjustifiable on a fundamental basis." Meacham argued that to be worth that much, Moderna would need to deliver between 1 billion and 1.5 billion doses of its coronavirus vaccine each year through 2038. Additionally, Moderna's entire pipeline of experimental drugs would need to prove successful and generate total peak sales of $30 billion.
Meacham believes those two assumptions are highly unlikely, so he repeated his underperform rating on Moderna's stock and $115 price forecast for its shares. Even after today's plunge, Meacham's price target is still 70% below the stock's current price near $385.
Today's news and Meacham's warning appear to have driven many investors to take profits and sell their shares in Moderna.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.
