Moderna: Science Day Takeaways: Updates add breadth, but intismeran still drives debate

Research evidence excerpt

Moderna: Science Day Takeaways: Updates add breadth, but intismeran still drives debate

Abbreviations

ACIP: Advisory Committee on Immunization Practices

ASCO: American Society of Clinical Oncology

CAR-T: chimeric antigen receptor T cell therapy

COVID: coronavirus disease

DMFS: distant metastasis free survival

EPS: earnings per share

HR: hazard ratio

Lynch syndrome: inherited cancer predisposition syndrome

NSCLC: non-small cell lung cancer

RCC: renal cell carcinoma

RFS: recurrence-free survival

UK: United Kingdom

PDUFA: Prescription Drug User Fee Act

Price objective basis & risk

Moderna (MRNA)

Our PO of $34 is based on our discounted cash flow (DCF) analysis that embeds risk-

adjusted assumptions (ranging from 17% to 100%) for MRNA's various pipeline

endeavors. We think that DCF best captures the value of future cash-generating revenue

streams from assets still in the pipeline today.

Our PO consists of $8/sh for infectious disease programs, $8/sh for oncology programs,

and approximately -$1/sh for rare disease programs. We also include $19/sh in cash in

our valuation. We utilize a WACC of 9-12% and a terminal growth rate assumption of -

25%.

Upside risks to our PO are 1) COVID markets see reinvigorated growth after a period of

slowdown, 2) a more moderate stance towards vaccine policy and requirements for

approval are taken at HHS, 3) faster share uptake of the RSV vaccine in the US and

international markets, 4) ACIP recommends re-vaccinating for RSV, and 5) moderating

cash burn.

Downside risks are 1) COVID-19 demand decreases more than we or consensus expect,

2) changes in political or regulatory environment impacts vaccine market, 3) mRNA

platform fails broadly outside of infectious diseases, 4) negative clinical readouts for

late-stage programs.