Moderna Shares Rally 15% As FDA Approves Pharma To Start Phase 2 Covid-19 Tests

Moderna, the Massachusetts-based pharmaceutical giant on Thursday announced it has been approved to begin Phase 2 of a clinical trial of its prospective COVID-19 flu vaccination and hopes to start testing it on 600 volunteers.

If the drug proves safe and successful - major "ifs" in the biopharmaceutical industry, where a lot of new drugs and vaccines eventually never get any authorization - Moderna expects to start testing it early this summer in the third and final phase of trials.

Previously, the drug firm had expected the final step would commence later in the fall. In Thursday's pre-market trading, shares were rising 15 per cent, with the company already posting a whopping 150 per cent year-to-date income.

Looking ahead further, the company is also finalizing the protocol for the mRNA-1273 Phase 3 trial, which is scheduled to launch in early summer 2020.

The imminent start of the Phase 2 procedure is a critical move forward, Stéphane Bancel, Chief Executive of Moderna, disclosed in a statement.

The main purpose of this series of experiments is to figure out whether the vaccine is safe and whether successful outcomes can be repeated in a much wider community from the first few tens of volunteers in the first process. Later tests will decide just how well the vaccine performs if it is effective.

Shares of the firm soared more than 16 per cent in pre-market trade before losing momentum after launch. The stock was up nearly 6 per cent in early trading.

The company said it expects to "incur substantial expenses this year" in designing and distributing its future vaccine. However, it added that, from its award by the Biomedical Advanced Research and Development Agency, it expects "a near match of expenses and reimbursements for those expenses."

Anthony Fauci, top official of the National Institutes of Health, called Moderna's mRNA vaccine "impressive," and last week the company announced a strategic global partnership to produce the vaccine with a target of up to 1 billion doses per year.

The company earned up to $483 million in funding from the Biomedical Advanced Research and Development Authority to expedite the vaccine's production.

Moderna stated that it has up to $2.4 billion to spend, including $1.7 billion in cash and acquisitions, and this year the company expects net cash used for property and equipment operations and purchases to be about $500 million.

Moderna was the first drug company to enter clinical trials with a potential vaccine, which researchers began injecting into healthy volunteers' shoulders in Seattle on March 16. According to the Milken Institute, an economic think tank located in Santa Monica, California, there are at least 123 vaccine candidates worldwide.