Moderna Shares Spike on H5N1 News—What’s Next for Investors?

Key Points

• Moderna stock jumped over 12% on concerns over the first confirmed death from bird flu in the United States.
• This is largely a reactionary move; but analysts are bullish on the stock for the potential of its pipeline, including a cancer vaccine the company is developing with Merck.
• Investors looking to go long on MRNA stock should wait for the company’s earnings in early February.  

Shares of Moderna Inc. NASDAQ: MRNA surged over 12% after news of the first confirmed death from the H5N1 bird flu in the United States. At one point, the stock had climbed over 14% before returning late in the trading session. However, the stock retreated after hours, trading at $47.53, and has since declined further.

Whenever a stock makes a sharp move on news like this, investors need to take a deep breath before making any investment decisions. In this case, the move in MRNA stock is mostly reactionary. Short interest is around 11%, so any surge in buying would trigger some short covering. 

Which isn’t to say there’s no correlation. The company did receive a $176 million grant from the U.S. Biomedical Advanced Research and Development Authority (BARDA) in 2023 to create an updated mRNA vaccine for the H5N12 virus. That virus is currently in early-stage testing. Nevertheless, that’s all speculative investors needed to try to burn short positions, but it may not be enough to sustain a rally. 

Is Moderna One of the Best Stocks of 2025?

Despite a consensus Hold rating from the Moderna analyst forecasts on MarketBeat, Barron’s recently put Moderna on its list of stocks to watch in 2025. Analysts are encouraged by the breadth of the Moderna pipeline.

In total, the company is forecasting to have approvals on 10 new vaccines in the next three years. That includes three candidates that it plans to launch in 2025.

In addition to treating respiratory viruses, Moderna has a partnership with Merck & Co. NYSE: MRK to develop cancer vaccines. This is a way for Moderna to take a seat at the table of personalized medicine. The company’s most advanced candidate is V940-Keytruda, which entered Phase III trials in 2024. The vaccine is pursuing indications for melanoma, NSCLC, and specific refractory lung cancers.

For its part in the partnership, Moderna is trying to identify genetic mutations in a patient’s tumor cells, then developing and administering a unique mRNA INT for each patient. The idea is that each INT (Iodonitrotetrazolium), which is a chemical compound, will be specific to every patient and activate their immune system to fight their specific cancer cells. 

Under the terms of the partnership, Moderna received a $250 million upfront payment from Merck. The two companies are splitting the development costs and will share the profits or losses equally if the vaccine reaches commercial status.

Making the Numbers Add Up

The significance that the additional revenue from new vaccines could provide is hard to understate. Currently, Moderna generates approximately $3 billion on the top line every year. It also has a $9 billion cash balance. That’s more than some biotech companies generate, even those with products in the market. 

Understandably, the bulk of that revenue comes in the company’s third and fourth quarters, which correlate with flu season in the Northern Hemisphere. As an example of that, Moderna reported $1.9 billion in revenue in its November earnings report. That brought the total for the first three quarters of 2024 to $2.2 billion. 

However, the concern has been the company’s R&D spending, which Moderna revised downward but will still be around $4.7 billion annually. The spending on R&D was fueled by the outsized profits it earned from its COVID-19 vaccine. 

But those funds have dried up. Which means the company is not profitable. And that explains why MRNA stock dropped over 60% in 2024, making it not only one of the worst-performing medical stocks but one of the worst-performing stocks of 2024 in all sectors. 

Sell This News and Wait for More

With the company's fourth-quarter earnings report not due until February, it's not surprising to see traders taking profits on this bump in MRNA stock.

But that’s when the real opportunity may arise. Investors will be waiting for updates on the company’s pipeline.

The analyst forecasts on MarketBeat have a consensus price target of $79.50 on MRNA stock. That gives the stock nearly 77% upside from the closing price on January 7. However, opinion around the stock has been mixed, which clearly means that not all analysts are bullish on Moderna’s prospects.