Shares of leading vaccine maker Moderna (MRNA) - Get Moderna, Inc. Report were lower Tuesday following Monday’s near-20% surge as the company moved forward with a new stock offering that could net it more than $1.3 billion in additional capital.
Moderna shares ended the trading day Monday at $80, a gain of $13.31 a share, after the company said results from the first human trial of its experimental coronavirus vaccine were positive, and that it was set to begin a broader, phase 3 trial earlier than previously expected.
After the close, Moderna also announced plans to issue 17.6 million new shares at $76 each. The offering is expected to close on Thursday. Moderna is also giving underwriters a 30-day option to buy up to an additional 2.64 million shares in common stock.
Moderna stock was down 2.28% at $78.18 in trading on Tuesday. The stock has risen more than 15% in the past seven days.
Boston-based Moderna has emerged as one of the front-runners in the race to create a viable coronavirus vaccine as its Food and Drug Administration fast-track-approved trials have shown positive results.
While other companies including Pfizer (PFE) - Get Pfizer Inc. Report, Johnson & Johnson (JNJ) - Get Johnson & Johnson Report, BioNTech (BNTX) - Get BioNTech SE Report and Altimmune (ALT) - Get Altimmune, Inc. Report - have also been working on a coronavirus vaccine, Moderna’s previous success at producing treating for other types of infectious diseases has lifted hopes that it is on the right path to creating a successful Covid-19 vaccine.
Indeed, the announcement comes following Moderna reported positive data on its early-stage human trial for a Covid-19 vaccine earlier Monday. The closely watched vaccine trial produced Covid-19 antibodies in all 45 participants.
In a previous statement, Moderna said it expects to primarily use proceeds from the offering to fund the manufacturing and distribution of its vaccine candidate, mRNA-1273 once it’s approved by federal regulators.
If there are any remaining proceeds, the company hopes “to fund clinical development and drug discovery in existing and new therapeutic areas; to fund further development of its mRNA technology platform and the creation of new modalities; or to fund working capital and other general corporate purposes.”
To be sure, TheStreet's Jim Cramer cautioned investors on Monday that, while encouraging, the results were just one step in the long road toward a vaccine.
Moderna is a terrific company, Cramer said, and if anyone can speed through the drug discovery process it will likely be Moderna. But seeing crowded beaches and long lines outside reopening restaurants is too much, too soon.
For now, Cramer said investors should continue to own stocks of companies that do well in a pandemic, like his COVID-19 index.
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