Biotechnology company focused on messenger RNA (mRNA) Moderna, Inc. (NASDAQ: MRNA) recently revealed that it has signed a Memorandum of Understanding with the Government of the Republic of Kenya to build its first mRNA manufacturing facility in Africa. The facility will be set up by the company with assistance from the U.S. government.
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Following the news, however, shares of the company declined over 7.5% to close at $125.50 in Monday’s extended trading session.
Strategic Impact
With access to quality healthcare facilities still a distant dream for many in the continent, Moderna, with its new manufacturing facility, is looking to fill that gap. It aims to produce up to 500 million doses of vaccines each year at its new facility in the region.
To this end, the company expects to invest up to $500 million in this new facility that will focus on drug substance manufacturing and can also be expanded to include fill/finish and packaging capabilities.
Management Commentary
The CEO of Moderna, Stephane Bancel, said, “With our mRNA global public health vaccine program, including our vaccine programs against HIV and Nipah, and with this partnership with the Republic of Kenya, the African Union and the U.S. Government, we believe that this step will become one of many on a journey to ensure sustainable access to transformative mRNA innovation on the African continent and positively impact public health.”
Price Target
On March 7, Deutsche Bank analyst Emmanuel Papadakis reiterated a Hold rating on the stock. The analyst, however, lowered the price target from $175 to $155, which implies upside potential of 22.6% from current levels.
The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 5 Buys, 9 Holds and 1 Sell. The average Moderna price target of $258.40 implies that the stock has upside potential of 104.3% from current levels. Shares have gained 2.4% over the past year.
Investor Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Neutral stance on MRNA, as 0.9% of portfolios tracked by TipRanks increased their exposure to MRNA stock over the past 30 days.
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