To say that Moderna‘s (NASDAQ:MRNA) COVID-19 vaccine has been a success would be a massive understatement, but there’s no scenario where it justifies the company’s $129 billion valuation all by itself. In this Fool Live video clip, recorded on Oct. 4, Fool.com contributor Matt Frankel discusses why Moderna’s true value could lie in its future product pipeline. 

Matt Frankel: Moderna has a $129 billion market cap right now, and one product essentially on the market. Everyone knows Moderna because of the COVID vaccine. But Moderna and Pfizer essentially use the same technology to make their COVID vaccines, and they have been wildly successful, to put it mildly. Moderna’s expecting $20 billion in revenue this year — for a company with one product, that’s pretty impressive.

They already have 500 million doses on order through the first quarter of next year. But to really justify that valuation, they’re going to need more than what they have now. They’re the second most valuable biotech stock in the world, by the way. Obviously, there are some more catalysts with their current product, the COVID vaccine.

Boosters are the most obvious right now. They just authorized Pfizer BioNTech boosters in certain groups. That’s probably coming for Moderna as well. Vaccine authorizations for kids, which are coming later this year hopefully, and other advanced purchase agreements. I know some governments — Canada in particular has offered to buy shots to be delivered through 2024 already. That will keep the revenue going for some time.

The real potential value in Moderna is the 37 different products they have in the pipeline, most of which use the same technology that the COVID vaccine, the significance is that it proved that this messenger RNA technology can work in humans. They have one that is entering phase 3 trials. They have 22 in clinical trials, out of those 37, the others are in development. Even if a few of those work and are successful, it could end up justifying the company’s valuation, but that’s still a big if at this point.

None of them are going to be, I just want to say definitely, but none of them are likely to be the big revenue cash cow that COVID vaccine is and generating $20 billion of revenue annually for the company. I like Moderna, I like them a little more than you guys do. I tend to believe in the promise of their pipeline, I guess, as a way to justify their valuation.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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