The Moderna Pullback is Worth a Shot A little over two years ago Moderna (NASDAQ:MRNA) was a relative unknown in the world of investing. The Massachusetts-based biotech company was making its public market debut hoping investors would take to its novel approach to drug and vaccine development. My how times have changed.

A little over two years ago Moderna (NASDAQ:MRNA) was a relative unknown in the world of investing. The Massachusetts-based biotech company was making its public market debut hoping investors would take to its novel approach to drug and vaccine development. My how times have changed.

Moderna is now a household name among investors and non-investors after beating out dozens of companies vying to create a COVID-19 vaccine. Its stock price climbed to nearly $190 in February 2021 on expectations of a major windfall. It has since pulled back more than 30% presenting an intriguing entry point for a company with growth potential that goes well beyond the coronavirus.

What are Moderna's COVID-19 Prospects?

Along with Johnson & Johnson and Pfizer-BioNTech, Moderna's COVID-19 vaccine is one of three that have been approved in the U.S. and is being administered in other countries. It's a remarkable accomplishment to be in the company of these pharmaceutical giants, and one that has certainly placed Moderna on the map.

With vaccine distribution well underway, the company's upcoming financial results should be outstanding. Moderna has raked in more than $18 billion worth of purchase agreements for its vaccine and is bracing for the likelihood that many more are on the way.

This week drug manufacturer Catalent announced that it is expanding its production of Moderna's COVID-19 shot. The agreement will almost double the output of the vaccine at Catalent's Indiana plant effective this month to approximately 400 vials per minute. At this pace, an additional 80 million vials will be filled annually.

But Moderna isn't stopping there. Recognizing the shortfalls of its two-dose COVID-19 regimen, it is also developing a one-shot vaccine that can be stored in a regular refrigerator. Positive results from that ongoing study could help the stock make another run at the $200 level.

So too could Moderna's progress with yet another COVID-19 vaccine. This next-generation COVID-19 vaccine is intended to address the potential for more variants of the coronavirus. With global variants of the disease threatening to setback the economic recovery, there is a clear need for more powerful coronavirus vaccines—and Moderna is once again a step ahead of the competition.

What Other Growth Opportunities Does Moderna Have?

Moderna may forever be linked to COVID-19, but eventually, the pandemic will fade into the history books. The company will return to focusing on developing other therapeutics and vaccines based on its messenger RNA (mRNA) technology.

A mRNA vaccine is a new way to protect people from infectious diseases that it doesn't introduce a weakened germ in the body. Instead, they train cells to make a protein that triggers an immune response. The approach has all sorts of potential for vaccinating against infectious diseases, heart disease, immune disorders, and even certain cancers.

Moderna's development pipeline includes several promising early and mid-stage candidates. More than half of its 24 mRNA candidates are in clinical studies. Earlier this year it launched three new vaccine programs designed to target the seasonal flu, HIV, and Nipah virus. It also announced a partnership with Vertex Pharmaceuticals to develop a novel cystic fibrosis treatment.

The most exciting program underway at Moderna may be its collaboration with Merck. This involves its personalized cancer vaccine candidate that targets a patient's specific tumor in conjunction with Keytruda. Late last year it released positive phase 1 data from a trial involving patients with head and neck squamous cell carcinoma (HNSCC).

Is it a Good Time to Buy Moderna Stock?

Now back down to around $130 per share, Moderna's risk-reward profile is more palatable. On the risk side of the equation, there is of course ongoing headline risk around the company's current COVID-19 vaccine. Although things seem to be going smoothly, negative news about side-effects or production setbacks could put downward pressure on the stock. And as with any biotech company, there is the omnipresent chance that clinical development setbacks spark a selloff.

The reward part is rather straightforward. Moderna has supply agreements in place all over the world that represent hundreds of millions of its COVID-19 vaccine doses. What's less certain is whether it will be successful in developing a one-shot vaccine. Given the high efficacy rate of its current vaccine and the money being poured into the one-dose development it's hard to envision this not becoming a success.

As the dark horse in the COVID-19 vaccine race, the market should know better than to discount Moderna's potential for commercializing more coronavirus solutions as the pandemic continues to take twists and turns. Looking further down the road, having greater financial resources and institutional backing should increase its chances for success in other disease and cancer areas.

Sell-side firms have a mixed view on Moderna which makes sense given the uncertain nature of its business. But while ratings on the stock are all over the place, analyst price targets are decidedly skewed to the positive. Of those firms venturing to make a price prediction, all but three have targets above the current share price. The other eleven firms (including one that has a sell rating) have targets ranging from $140 to $208 with several north of $200.

So, despite its success, Moderna still carries plenty of risk for investors. But given its potential to produce additional COVID-19 vaccines and progress its non-COVID pipeline, at this level, the stock is well worth a shot.