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How Significant Are Moderna's Asian Regulatory Wins?

Moderna (NASDAQ: MRNA) recently went two for two in Asia. The company picked up an approval in Japan for its COVID-19 vaccine and secured authorization in South Korea. In this Motley Fool Live video, recorded on May 26, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss the impact of these regulatory wins for Moderna.

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Keith Speights: Another company also had some good news in Asia: Moderna (NASDAQ: MRNA), ticker there's MRNA. Moderna won its Japanese approval for its COVID-19 vaccine last week, and it also received authorization in South Korea. Brian, how big are these two regulatory wins in Asia for Moderna?

Brian Orelli: Like we talked about with Novavax (NASDAQ: NVAX), Moderna is also partnering in both countries. In Japan, it has a deal with Takeda (NYSE: TAK). They're going to import 50 million doses this year. They are in discussion with the government for 50 million doses in 2022, and then Moderna is setting up manufacturing in Japan.

In South Korea, they're working with GC Pharma. They plan to open a commercial subsidy in South Korea this year. Seems like Moderna is really trying to become a global player. I think they opened up a couple of European site offices as well.

Moderna has a lot more cash than Novavax, so it makes sense that it would have the ability to do it, but I'm still not sure it's really the best strategy. Want to see whether pays off in the long run, and part of that is probably going to be how long the time between when coronavirus vaccine ramps down and Moderna is able to ramp up its next few drugs in its pipeline.

That time is short or they overlap, then this will probably be a good move. If there is a long time in between the two and setting up a whole bunch of European sites and global sites all over the world, it probably doesn't make very much sense. Probably would make more sense to just partner those out, and then when they fizzled out, then it would be the partner's problem, not their problem.

Speights: Do you think as Moderna makes more money, and we know it's going to make a lot more money over the course of the next several quarters, do you think that's going to change how the company approaches some of these partnering deals?

Orelli: Yeah. I certainly don't think they need any partners at this point. It's just how long is that cash going to continue to roll in. If it rolls in for three, four, five, years, well, then they're in really good shape and they wouldn't need any partners ever. If it's one or two years now, maybe there's going be a lag between where they're not going to have very much cash coming in, and now maybe they think, they may need to do partners or they need to do secondary offerings to raise some additional cash.

Brian Orelli, PhD owns shares of Novavax. Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.


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