Moderna Stock Surges As Vaccine Said To Work Against The New Delta Strain

Shares of Moderna Inc. surged to a record high as concerns about the even-more contagious delta variant of Covid-19 spread.

The shares went up as high as as 6.9% to $238.40, breaking through the prior intraday record set earlier this month. Trading volume was about 1.2 times the 10-day average as of 11:40 a.m. in New York.

The company reported earlier that its vaccine produced protective antibodies against the delta variant, which emerged in India and has been spreading quickly throughout the world.

Moderna researchers tested blood samples from eight people for antibodies against different versions of the spike protein from different coronavirus variants, including delta, which emerged in India. The vaccine “produced neutralizing titers against all variants tested,” the company said in a statement. The results were released on the pre-print server bioRxiv.

India’s drug regulator approved the import of the shots for restricted emergency use early on Tuesday. The country follows other richer nations with a little more than 4% of the population fully vaccinated, compared with the United States, where about half of the population are vaccinated.

Some analysts have expressed concern concerning the sudden rise in Moderna’s share prices, which has pushed the Massachussetts-based company’s market capitalization to over $95 billion. Moderna continues to be driven by momentum, and today’s study results are “clearly showing good coverage of variants with their vaccine,” Michael Yee at Jefferies said in an email.

The emergency authorization in India as well as Sanofi’s plans to spend about $480 million to speed development of messenger-RNA vaccines, where Moderna has been spending billions per year, is also adding to today’s rally, he said.

He also informed clients last week that trading has moved beyond the fundamentals of future vaccine sales. “I think there’s machines, I think there’s quants, I think there’s just buying of good charts,” he said. “It’s a momentum stock.”

Vaccine stocks like Moderna and BioNTech SE have surged over the past 12 months. Shares of both have rallied more than 250% during the period with Moderna currently trading at $235.52 and BioNTech at $228.77. 

The delta strain is fast becoming the dominant strain in countries around the world, including France, South Africa, Germany, and Kenya.

Hong Kong has banned all flights from the U.K. amid rising infections, while Spain took visitors from the country off its restriction-free travel list. 

Cases have also continued to climb in Tokyo, with less than a month before the scheduled start of the Olympic Games. 

In Kenya, the government has imposed restrictions on movement in the region to try and stem it from spreading nationwide.

“If there’s a fourth wave in July-August, it will most likely be due to delta,” said Patrick Amoth, the acting director-general for health at the ministry. Restrictions in western Kenya were imposed to try and “avoid a catastrophic fourth wave,” Amoth said.

So far, there has been 181.5 recorded cases of Covid-19 around the world with over 3.93 million deaths. More than 2.97 billion doses of vaccine has been administered.