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Moderna's Innovation Still Building a Moat

The company's COVID-19 vaccine has shown the vast potential of its mRNA technology.

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Moderna’s (MRNA) mRNA technology has gained rapid validation as sales of its COVID-19 vaccine soar in 2021, but we think the company has yet to secure a narrow economic moat around its business, largely due to uncertainties tied to an evolving virus and the changing competitive landscape for innovative vaccines.

In a record-breaking span of just 11 months, Moderna created, developed, manufactured, and got regulatory authorization for mRNA-1273, a two-dose COVID-19 vaccine that is one of the first two mRNA vaccines ever authorized (alongside Pfizer/BioNTech’s (PFE)/(BNTX) BNT162b2). The pandemic accelerated Moderna’s evolution into a commercial-stage biotech, and we expect that the company’s ramp-up in manufacturing and clinical know-how will pave the way for faster timelines for additional programs. Moderna’s mRNA platform, involving rapid design and similar manufacturing across programs, allows the company to pursue multiple programs in parallel. Moderna also retains full rights to most of its programs, although key partnerships with Merck (MRK) and AstraZeneca (AZN) help support its efforts in oncology.

Karen Andersen does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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