Moderna is poised to surge another 45% in the next year, COVID-19 vaccine could generate more than $5 billion in annual sales, Jefferies says

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  • On Monday, Jefferies initiated coverage of Moderna with a “buy” rating and a price target of $US90 on the potential that the pharmaceutical company’s COVID-19 vaccine is approved.
  • That represents 45% upside from where shares of Moderna closed on Friday.
  • Jefferies also thinks that if the COVID-19 vaccine is approved, it could generate more than $US5 billion in annual sales at its peak.
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Moderna is set to surge higher even after its epic 220% rally so far this year, according to Jefferies.

The firm initiated coverage of the pharmaceutical company Monday with a “buy” rating and a $US90 price target, representing 45% upside from where the stock closed Friday.

The bullish rating hinges on Moderna’s COVID-19 vaccine working and resulting in large government supply contracts, Jefferies equity analyst Michael Yee wrote in a Monday note.

“We think there is a good probability Moderna’s vaccine will work and get at least emergency use authorization in 2021,” Yee wrote. “We think a viable vaccine can generate billions in sales, which we see as reasonable given there would be high demand over the first 1-2 years.”

Read more: The CEO of an investment platform that’s helped startups land $US150 million in funding explains 5 opportunities for unicorns to emerge from the recession based on the meteoric successes he’s seen so far

In the first full year of sales of its potential vaccine, Jefferies’ model shows it could bring in $US2 billion worldwide if roughly 50 million people get the vaccine at $US50. This could grow to a peak of $US5 billion between 2025 and 2026, according to the note.

There is also further upside, according to Yee, if significantly more people get the vaccine and the price is pushed higher. “This can quickly get to big numbers of $US10-20B+ in theory,” said Yee.

There are other catalysts that could drive shares of Moderna higher, including publication of the phase 1 details, preliminary data from the phase 2 study of patients in mid-2020, and potential phase 3 prevention data this year or next, or anticipated emergency use authorization or accelerated approval of its COVID-19 vaccine.

Moderna is one of many pharmaceutical companies and biotech firms racing to develop a coronavirus vaccine. The company has a 30,000-person late-stage study set to begin sometime in July.

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