Less than five years after the outbreak of the COVID-19 pandemic, it is only human nature for consumers and investors to feel concern and react swiftly upon hearing news of the hantavirus. Over the past week, biotech stocks such as Moderna (MRNA), Novavax (NVAX), and Inovio (INO) have seen significant market-driven gains.
However, experienced investors know that making investment decisions based solely on news headlines and short-term events is not a wise strategy. Avoiding hasty actions and conducting thorough due diligence before buying these stocks is crucial. Whether the recent surge in stock prices has detached from fundamentals has become a focal point of market attention.
According to the U.S. Centers for Disease Control and Prevention (CDC), hantavirus is a group of viruses found globally that can cause severe and even fatal diseases. The virus is typically transmitted by rodents, and most hantaviruses do not spread from person to person. Earlier this month, on a cruise ship carrying 147 people, multiple passengers reported experiencing various symptoms. As of this report, health officials have detected and confirmed seven cases of hantavirus infection on the ship, with the specific strain identified as Andes virus. Three people have died on the ship, two of whom were confirmed to be infected with the virus. Health agencies are closely monitoring developments and have placed the remaining passengers in quarantine.
With its mRNA vaccine platform, Moderna has the potential to deliver excellent returns for investors over the long term. There are two reasons for this. First, mRNA vaccines can be designed more quickly than traditional vaccines. Traditional vaccines typically work by injecting a weakened virus to give the immune system a “dry run,” but this process requires time to cultivate large quantities of the virus and safely inactivate it. In contrast, mRNA vaccines work by providing the immune system with instructions on how to fight the virus, which was a key reason why mRNA vaccines were developed at a record-breaking pace during the COVID-19 pandemic.
Second, Moderna has a vast pipeline of investigational products that could expand and transform its approved portfolio over the next five years. Its Phase 3 clinical pipeline includes a vaccine against norovirus—an area where no approved products currently exist. Moderna’s influenza vaccine may also be nearing approval. Existing flu vaccines are generally not very effective, and the market urgently needs newer, better products. Additionally, the company is developing a highly promising personalized cancer vaccine, mRNA-4157, which is currently in multiple Phase 2 and Phase 3 studies. Interim trials have shown that this product, when used in combination with Keytruda, performs excellently in reducing the risk of recurrence and death in patients with melanoma. Moderna has even more candidate products in development.
Admittedly, influenced by the uncertainties in the COVID-19 vaccine market, the company’s financial performance has not been strong in recent years. Since 2022, this vaccine-focused company has seen significant declines in both revenue and earnings. Nevertheless, Moderna’s deep pipeline and innovative technology platform may ultimately drive the company to improve its performance and deliver substantial returns over the long term. This stock is worthy of serious consideration by investors.
The market panic triggered by hantavirus has driven short-term gains in some biotech stocks, but CDC assessments indicate that the risk to the U.S. public is extremely low, and the conditions for person-to-person transmission of the virus are stringent. Investors should distinguish between short-term sentiment and long-term value. Facing stock price fluctuations driven by sudden public health events, rationally evaluating corporate fundamentals rather than chasing short-term fads is a sound investment strategy.
