Shares of Moderna surged 9.5% on Tuesday to $32.75 in a notable reversal of recent bearish sentiment, buoyed by legal developments and renewed investor focus on the company’s potential vaccine pipeline.
The uptick follows a turbulent period for the pharmaceutical firm, which has seen its stock tumble more than 80% over the past year.
On Monday, a coalition of major medical organizations filed a lawsuit against US Health Secretary Robert F. Kennedy Jr. and the Department of Health and Human Services, challenging recent decisions to remove healthy children and pregnant women from the COVID-19 vaccine schedule.
The plaintiffs argued the changes represent a clear threat to public health and demanded the court declare the moves unlawful.
The lawsuit, led by Richard H. Hughes IV—a vaccine law expert from George Washington University—accuses Kennedy of attempting to dismantle public confidence in vaccines.
“The secretary’s intentions are clear,” said Hughes. “He aims to destroy vaccines.”
The plaintiffs include the American Public Health Association, the American Academy of Pediatrics, and other top health bodies.
Analyst sees gain as “reversal of peak negative investor sentiment”
B. Riley Securities analyst Mayank Mamtani said Moderna’s share movement likely reflects “a reversal of peak negative investor sentiment,” pointing to the recent lawsuit and upcoming vaccine advisory committee meetings as potential short-term catalysts.
The news may have helped rebalance sentiment in a market that had heavily shorted the stock.
Other vaccine makers also posted gains, with Pfizer rising 1.6% and Novavax climbing 6.7%.
The latter benefited from recent late-stage study results tied to its COVID-influenza combination and standalone flu vaccines, Mamtani said.
Why is MRNA struggling?
Despite the day’s gains, Moderna’s outlook remains difficult.
The company is still down 22% year-to-date and 72% over the past 12 months.
Investor confidence was shaken last year after Moderna announced weaker vaccine sales in Europe, attributed to a renegotiated contract between the EU and Pfizer-BioNTech.
The news led to a steep sell-off following the company’s second-quarter earnings.
Financially, Moderna’s revenue has dropped sharply, from $18.9 billion in 2022 to $3.1 billion over the past year, an 83% decline.
Sales are forecast to drop further to around $2.1 billion in 2025 as demand for COVID-19 vaccines continues to wane and the company adjusts to a seasonal vaccine model.
Short interest remains high despite the recent bounce.
As of mid-June, 18.6% of Moderna’s float was sold short, making it the second most-shorted stock in the S&P 500, down only slightly from May’s peak levels.
In January, Moderna cut its 2025 revenue forecast by $1 billion and pushed back its break-even expectations by two years, citing delays in its product development pipeline.
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