Vaccinated people are not the only ones with waning immunity. Moderna is facing waning buyers. Omicron changed the dynamics of the pandemic. It also rendered weakened the importance of Moderna’s vaccine.
Countries that achieve high vaccination rates are still better off. Delta is still a potential threat, as are variants after delta. Governments are still fighting the pandemic with this view.
In reality, Omicron and the sub-variant, which spreads faster, will lead to strong sales of antiviral pills. Pfizer (PFE) and Merck (MRK) could become the first line of defense for Omicron. Investors might avoid vaccine stocks like MRNA and BioNTech (BNTX). MRNA stock would continue its downtrend from here.
Ironically, MRNA stock is cheap at current levels. Now in value territory, the company’s strong cash flow, the potential for an Omicron vaccine, and the need for annual vaccinations are positive catalysts.
Your Takeaway
Nasdaq’s correction pulled the speculative biotechnology index lower. This also hurt MRNA stock. But Moderna is not a speculative biotech firm. It is a drug company that will generate strong free cash flow growth. Consider starting a position on Moderna. This creates a hedge in case the coronavirus mutates to a variant that is more dangerous than Omicron.
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