Moderna CEO: "I Didn't Lose a Minute's Sleep Over the [Patent Waiver] News"

I posted this note a little while ago to my Patreon subscribers, giving them first crack at the information - but want to post it here as well...

The first question in Moderna's post-earnings conference call was about the "patent waiver" announcement by the Biden administration.

CEO Stephan Bancel said, "I don't think it changes anything for Moderna."

We said last October we would not enforce our patents during the pandemic.

But as I said in my prepared remarks, there is no manufacturing capacity for this anywhere in the world - this is a new technology. You can't go and hire people who know how to make m-rna.

And even if all those things were available, whoever wants to make the vaccine would have to buy the machines, invent the manufacturing process, have a clinical trial, get the data, get it approved, and then scale up their manufacturing.

So I think it just underscores what I wrote in my earlier note.

If it were that easy to create a generic version of Moderna (or Biontech)'s vaccine (that's as effective as the real deal), pharma manufacturers in China and elsewhere would have long ago copied it and flooded the market with their own versions.

That said, MRNA's stock was down as much as 9% this morning, after dropping 6% yesterday.

I also noted additional commentary in a Reuters article from a Wall Street analyst who covers the vaccine makers:

One industry source said U.S. companies would fight to ensure any waiver agreed upon was as narrow and limited as possible.

Robert W. Baird analyst Brian Skorney said he believed the waiver discussion amounted to grandstanding by the Biden administration and would not kick off a major change in patent law.

"I'm skeptical that it would have any sort of broader long- term impact across the industry," he said.

So my instinct is that the White House will probably walk back its comments in coming days, or quietly revise the scope of the patent waivers in such a way to make the pharma industry happy - but save face to the international community calling for this action.

Let's also keep in mind that MRNA's selloff is occuring as the Nasdaq has begun to weaken sharply as well. When we see heavy selling in the major tech names like Apple, Amazon and all the rest, it tends to drag almost everything else down with it.

My instinct is that Moderna's shares are going to get "rubber band"-ed for as long as the Nasdaq continues its correction in coming sessions - getting stretched lower by sellers, then yanked higher by bargain hunters.

How can I be so sure?

Well, I can't be - that's why it's the stock market (insert smiley-face here!)

But if we find ourselves thinking "No way would I buy MRNA now...too risky"...well, that's what we all think when a profitable stock has fallen sharply and suddenly has few friends in the marketplace.

As for myself, I'm a MRNA shareholder. I haven't sold any shares that I've picked up from last fall, and from earlier this year.

Jeff