Moderna Stock Rises 3% On Vertex Deal

Moderna stock (MRNA) is up 2.7% in Thursday’s pre-market trading after the company inked a deal with Vertex Pharmaceuticals for the treatment of cystic fibrosis (CF) using gene editing.

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Moderna and Vertex (VRTX) have entered into a strategic research collaboration and licensing agreement for the development of lipid nanoparticles (LNPs) and messenger RNAs (mRNAs) in gene-editing therapies used in the treatment of CF.

Under the financial terms of the agreement, Moderna will receive upfront payment of $75 million and will be eligible for milestones of up to $380 million plus tiered royalties on any products that result from the collaboration.

The initial focus of the three-year research partnership will be the discovery and optimization of novel LNPs and mRNAs that can deliver gene-editing therapies to cells in the lungs, enabling the production of functional cystic fibrosis transmembrane conductance regulator (CFTR) protein.

Moderna’s CEO Stéphane Bancel said, “Our first collaboration with Vertex to deliver mRNA coding for cystic fibrosis protein in lung cells is advancing well and this second collaboration aims at using Moderna’s technologies to explore the use of gene editing in lung cells.”

As part of the collaboration, Moderna will conduct research to optimize novel LNPs for the development of gene-editing therapies in lung cells used in the treatment of CF. The company will also be responsible for the manufacturing of LNPs and mRNA constructs encoding gene-editing endonucleases. Meanwhile, Vertex will provide other components of the gene-editing therapies to be formulated into LNPs, as well as subsequent pre-clinical and clinical development and potential commercialization efforts.

On Wednesday, Moderna announced a collaboration with Chiesi Group to develop mRNA therapeutics for pulmonary arterial hypertension. (See MRNA stock analysis on TipRanks)

Ahead of Moderna’s Research & Development investor conference scheduled on Sept. 17, Chardan Capital analyst Geulah Livshits said, “While [the] R&D Day is set to focus on the company’s clinical programs (and we anticipate considerable focus on Covid-19), we may get additional color on how these new collaborations fit within Moderna’s strategic vision for growth outside the vaccines modality that has captured the majority of market attention in recent months.”

Livshits reiterated a Buy rating on the stock with a price target of $95. With shares up a stellar 252% this year, the average analyst price target of $90.62 implies further upside potential of about 32% in the coming months.

The rest of the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 11 Buys, 2 Holds and 1 Sell rating.