1 Crucial Thing to Look For in Moderna's Earnings Report

$Moderna, Inc.(MRNA)$

KEY POINTS

• Moderna’s coronavirus vaccine is bringing in billions of dollars.
• But investors worry about whether these sorts of gains will continue.
• One element may offer us clues.

It has to do with the next stage of the health crisis.

Moderna(MRNA-0.42%)is generating billions of dollars in revenue and profit from its coronavirus vaccine. But that isn't necessarily what will wow investors during next week's earnings report. That's because many Moderna-watchers are looking into the future instead of into the past. And with more and more experts predicting an end to the pandemic -- even Moderna's CEO -- the big concern is Moderna's revenue moving forward. After all, the coronavirus vaccine is the biotech's only commercialized product.

So, of course, Moderna's revenue, profit, and cash levels will be important items to look at when the company reports earnings on Feb. 24. But there's another element that's even more significant. This element could determine whether Moderna will thrive in tomorrow's coronavirus vaccine market or be outpaced by rivals. Let's take a look at this one crucial thing to look for in Moderna's report.

Looking past the pandemic

I'll be looking for anything Moderna has to say about its strategy to win once the pandemic has shifted to endemic. By this, I mean how Moderna aims to maintain or even extend its leadership in the market.

The company has already given us some clues in recent times. Moderna is working on several ways to handle the coronavirus moving forward. And all of them have to do with finding the most efficacious booster to be given annually. Right now, the company is providing boosters that are a lower-dose version of its original vaccine.

But Moderna is also working on a booster specifically targeting omicron as well as boosters targeting more than one variant -- such as the delta and beta variants. Most of these candidates are in phase 2 studies.

The lower-dose vaccine used as a booster is effective against variants including omicron. But it's not as efficacious as it was against the original coronavirus. So, the pressure is on for Moderna to create a booster that's better adapted to today's variants and those of the future. Any details on progress here will be key. If Moderna can come up with a better booster, it could secure its market position in the next stages of the coronavirus story. And that could equal moreblockbuster revenueahead.

An annual combination vaccine

We could stop here -- and if Moderna's news on these programs is positive, we could cheer. But let's look even further into the future. Moderna doesn't plan on delivering a booster and calling it a day. The company has a bigger plan: An annual combination vaccine to protect against several viruses -- for instance, flu, the coronavirus, and respiratory syncytial virus (RSV). Moderna calls this a "pan-respiratory annual booster vaccine." The idea is to create a vaccine that could be easily updated as needed with variants or viruses of concern.

Any updates on this program are an important part of Moderna's future coronavirus strategy. That's because this candidate could be a recurrent source of major revenue over the long term. Healthcare providers and individuals clearly would favor one annual shot to cover a variety of respiratory viruses.

Modernaisn't the only companyinvestigating a combination vaccine. In fact, rivalNovavax's combined vaccine program is more advanced. Novavax has completed enrollment in a phase 1/2 study. Moderna is still in the preclinical stage. But it could pick up speed. That's thanks to its mRNA technology. The use of mRNA allows for faster development than traditional vaccine technology. And even if Moderna doesn't make it to market first, there still is plenty of room for more than one maker of a combined vaccine.

A turning point

Why is Moderna's progress on these points so important right now? That's because we're at a turning point. A great percentage of the population is fully vaccinated. And, as mentioned earlier, we're hopefully heading toward the end of the pandemic. This means the next few years won't look exactly the same as the past two for vaccine makers. By understanding Moderna's approach in the mid-term to long term, we can get a better idea of what vaccine orders and revenue may look like down the road.

So, news or details about Moderna's booster candidates or investigational combination vaccine should be our focus during this nextearnings report. If Moderna wins here, investors may win over the long term.