Covid-19 stock market darling Moderna (MRNA) appears to be getting its mojo back with investors following a punishing 85% drop in the shares from their September 2021 highs.

Over the last six months Moderna’s shares have more than doubled and despite the fall over the past couple of years, they remain one of the best performers in the benchmark S&P 500, notching up gains of 880% over the last five years.

The recovery is being driven by consistently good news emanating from the company’s deep pipeline of new vaccines based on its mRNA technology which has the potential to revolutionise medicine.

Unlike traditional vaccines which are made from a neutered version of a virus and injected to teach the body’s immune system how to identify the virus, mRNA uses the body’s natural biological processors to treat disease and prevent infection.

Having developed the first effective mRNA-based Covid-19 vaccine, Moderna has come up trumps again after reporting (10 June) positive late-stage trial results from its combined flu and Covid-19 vaccine.

Chief executive Stephane Bancel believes a combined vaccine has the potential to reduce burdens on health systems and pharmacies, as well as offering more convenience that could improve compliance and provide stronger protection against seasonal diseases.

While the pandemic launched Moderna into the limelight and saw it generate peak revenue of over $19 billion in 2022, the company’s ambition reaches much further than a single product.

In total, Moderna has more than 45 products in development including a vaccine for the digestive system bug norovirus, as well as vaccines for AIDS and Zika virus.

The long-term potential applications of Moderna’s mRNA technology across several diseases is why the shares are a core holding for growth investor Ballie Gifford which manages the popular Scottish Mortgage Trust (SMT).

Moderna received regulatory approval for its RSV (respiratory syncytial virus) vaccine in May which management believes, once launched, will contribute to total sales expected to top more than $4 billion in 2024.

The virus causes cold-like symptoms and is a leading cause of pneumonia in babies and older adults, leading to 177,000 hospitalisations and 14,000 deaths in the US annually.

Moderna’s treatment goes head-to-head with market leaders Arexvy, made by GSK (GSK) and Pfizer’s (PFE:NYSE) Abrysvo which generated sales of $1.2 billion and $890 million respectively in 2023.

The biotech’s drug pipeline includes a vaccine for melanoma, the deadliest skin cancer. In a prior study the vaccine, called mRNA-4157, when administered with Merck’s (MRK:NYSE) Keytruda was found to help reduce the risk of recurrence or death by 49% in patients with melanoma. 

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