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Moderna (NYSE: MRNA) shares surged approximately 5% in premarket trading to $27.87 following FDA approval of its new lower-dose COVID-19 vaccine, mNEXSPIKE, for limited use in high-risk populations. The approval represents a significant milestone for the biotech company, which has faced challenges with government funding cuts and declining revenues, providing a much-needed boost to investor confidence.
 

Moderna Shares Gain on FDA’s Limited Approval for Low-Dose COVID-19 Vaccine

Moderna shares closed at $26.56 on May 30, 2025, down 1.37% for the day, but surged in premarket trading to $27.87, representing a 4.93% gain following the FDA approval announcement.

The biotech company has struggled significantly over the past year, with shares declining 82.47% compared to the S&P 500’s 12.92% gain. Year-to-date performance shows an even steeper decline of 36.12% versus the market’s modest 0.51% increase.

Despite the recent challenges, the company maintains a market capitalization of $10.272 billion and holds substantial cash reserves of $5.98 billion. However, Moderna’s financial metrics reflect the difficulties facing the company, including a negative profit margin of 105.67%, diluted earnings per share of negative $8.73, and negative free cash flow of $3.2 billion.

The 52-week trading range spans from $23.15 to $158.82, highlighting the stock’s dramatic volatility over the past year. Analyst price targets range from $20 to $198, with an average target of $47.70, suggesting potential upside despite the company’s current challenges.
 

FDA Grants Limited Approval for Lower-Dose COVID Vaccine

The FDA approved Moderna’s mNEXSPIKE vaccine for use in adults aged 65 and older, as well as individuals between 12 and 64 years old who have at least one underlying health condition that increases their risk from coronavirus.

The new vaccine requires only a 10 microgram dose compared to the 50 microgram dose of Moderna’s current Spikevax vaccine, representing just one-fifth of the original dosage. This lower dose requirement is made possible through refined immune targeting technology, marking a significant step toward next-generation coronavirus vaccines.

The approval was based on results from a Phase 3 clinical trial involving approximately 11,400 participants aged 12 years and older. The study demonstrated that mNEXSPIKE showed 9.3% higher relative vaccine efficacy compared to Spikevax in individuals aged 12 and older, and 13.5% higher efficacy in adults aged 65 and older. The trial found that mNEXSPIKE had a similar safety profile to the original vaccine, with fewer local reactions and comparable systemic reactions.

Common side effects included injection site pain, fatigue, headache, and muscle pain. Moderna CEO Stéphane Bancel emphasized that the approval “adds an important new tool to help protect people at high risk of severe disease from COVID-19,” noting that more than 47,000 Americans died from the virus last year alone.
 

Why mNEXSPIKE’s Approval is Important for Moderna

The mNEXSPIKE approval comes at a critical time for Moderna, which recently faced significant setbacks with government funding cuts. The U.S. Department of Health and Human Services terminated a $590 million contract for the development of pre-pandemic influenza vaccines, dealing a substantial blow to the company’s pipeline and financial outlook. The terminated funding was originally intended to accelerate development of mRNA-based pandemic influenza vaccines and enhance the company’s mRNA platform capabilities.

Despite this setback, Moderna plans to explore alternatives for late-stage development and manufacturing of its H5 avian flu vaccine program, consistent with the company’s strategic commitment to pandemic preparedness. The new COVID vaccine approval provides validation of Moderna’s next-generation vaccine technology and offers a potential revenue source as the company prepares for the 2025-2026 respiratory virus season.

Moderna expects to have mNEXSPIKE available alongside Spikevax and mRESVIA, its approved respiratory syncytial virus vaccine, providing a broader portfolio of respiratory vaccines. The company is also seeking regulatory approval for mNEXSPIKE in multiple international markets, potentially expanding its global reach.

The approval mirrors restrictions previously set by the FDA for competitor Novavax’s COVID vaccine, reflecting the evolving regulatory approach under the Trump administration, which has shown increased skepticism toward vaccines under Health Secretary Robert F. Kennedy Jr.
 

Moderna Still Faces Several Long-Term Challenges

While the FDA approval provides immediate positive momentum for Moderna’s stock, the company faces significant long-term challenges that investors continue to monitor closely. The biotech firm’s financial performance has deteriorated substantially, with trailing twelve-month revenue of $3.18 billion generating a net loss of $3.36 billion.

The company’s negative return on assets of 15.84% and return on equity of negative 29.34% highlight operational difficulties as COVID vaccine demand has normalized. Analyst sentiment remains mixed, with price targets ranging dramatically from $20 to $198, reflecting uncertainty about the company’s ability to diversify beyond COVID vaccines successfully.

The company’s substantial cash position of nearly $6 billion provides a financial cushion, but negative free cash flow of $3.2 billion raises questions about cash burn rates and sustainability. Moderna’s success will largely depend on its ability to advance its broader mRNA platform beyond COVID applications, including potential treatments for cancer, rare diseases, and other infectious diseases.

The mNEXSPIKE approval demonstrates the company’s continued innovation in vaccine technology, but investors will be watching closely for evidence of revenue diversification and a path to profitability. The regulatory environment under the Trump administration adds another layer of uncertainty, particularly given the administration’s stated skepticism toward certain vaccine programs, though the limited approval suggests continued support for targeted vaccination strategies for high-risk populations.

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