Financial Data (last update: 3/4/2022)
03/24/2024
For Portfolio III
Close positions and invest in index ETF/Cash
Use the processing to invest in index ETF or stay in cash in Portfolio III.
It is proved that the technology of m-RNA is a more advantageous technology for medicine development. However, the factors of declined Covid infection cases, vaccination fatigue, vaccination reluctance has caused the dramatic decline in Covid vaccine sale for Moderna. Even with its fast development of RVS vaccine and flu vaccine, the foreseeable revenue for Moderna can not compensate the current level of stock price.
Again, concentration investing involves higher risk of significant loss without the protection of diversity.
Each individual investor should always consider their own investment goal, risk tolerance, investing span and objectives for their investment positions. Investing in securities involved the risk of total losses. Investors should always consult with financial professionals.
04/23/2023
For Portfolio III
Value is fully recognized
Moderna Inc (MRNA)
Reduce the position of MRNA to 2% of Portfolio III
As Covid-19 is spreading like seasonal flue now even there are occurrence of regional epidemic. It is more likely than not Covid-19 and immunity is in an state of equilibrium. Therefore, current market value of Moderna is a fairly represented and reflects the current state of future revenue and profit from Covid-19 vaccine.
The upside of share price of Moderna is narrowed now and likely dependent on the development of new medicines in the pipeline. Even though Moderna and BioNTech have demonstrated the advantage of mRNA over other methods of pharmaceutical development, the time frame of a drug development is long and wide which will not help the advance of stock price. Addition to the prolong drug development, the current general market condition is in a state of volatile and uncertainty. We reduce the holding of Moderna Inc to 2% of the Portfolio III in order to preserve cash for better opportunity.
Again, concentration investing involves higher risk of significant loss without the protection of diversity.
Each individual investor should always consider their own investment goal, risk tolerance, investing span and objectives for their investment positions. Investing in securities involved the risk of total losses. Investors should always consult with financial professionals.
02/23/2023
For Portfolio III
Position reduction due to the fact change
Moderna Inc (MRNA)
Reduce the position of MRNA to 5% of Portfolio III
Globally, government and citizen have given up to contain Covid-19 even China government had given up such effort. Citizen are ready to live with Covid-19 and with least vaccination likely.
FDA and CDC are more like than not to designate Covid-19 vaccination as annual event. The result is the reduction on sale of vaccine shoot. We believe the trend and situation is set in unless there is a terrible variant coming up.
The reduction is due to the baseline of its sale of Covid-19 vaccine is adjusted lower. Previously, the anticipation of vaccination will be in 9-month interval. Softwater Investment is still convinced the evidence of medical technologies of mRNA and its results. Therefore, keep a smaller position and participate longer run for the development in pipeline.
Again, concentration investing involves higher risk of significant loss without the protection of diversity.
Each individual investor should always consider their own investment goal, risk tolerance, investing span and objectives for their investment positions. Investing in securities involved the risk of total losses. Investors should always consult with financial professionals.
11/07/2022
Update LNPs
Moderna, BioNTech
It is clear now that both Moderna and BioNTech did not develop their own LNP and used third party LNP products. Softwater Investment believes that more likely than not that Moderna and BioNTech will lose the lawsuits. However, the impact on Moderna and BioNTech would not be significant financially. It is more likely that both mRNA vaccine makers have to pay royalty to Arbutus Biopharma for using LNP.
09/22/2022
For Portfolio III
Capital preservation
Moderna Inc (MRNA), BioNTech SE (BNTX).
Reduce MRNA to 7% of the Portfolio III.
Reduce BNTX to 10% of the Portfolio III.
After President Biden stated that Covid-19 pandemic was over, Congress is almost not going to fund any Covid-19 related budget. The request for further Covid-19 vaccine shots is murkier in the United States than EU due to the difference in healthcare systems.
From here, MRNA and BNTX should be treated as two totally different investments. In the past year and half, the medicine developments in pipelines from both companies have begun to show differences in progress. To view the pipelines & progress, click: BNTX, MRNA.
We believe BNTX having better progress in their medicine development in the pipeline than MRNA; hence, more weight is putting on BNTX.
Scale back investing in MRNA and BNTX is to preserve capital for future when requirement for Covid-19 vaccine shots on guideline is clearer. Softwater Investment is seeking the probability that 40% of current vaccinated population will continue the shots with older, immune compromised and high risk population having extra shot annually, same rate as annual flu shots in the United States, except for population in China, Russian, Indian, and some regions in Africa and Americas.
p.s. Investors should have zero expectation that China will utilize vaccines from either BNTX or MRNA. Clinical trial for BNTX in China currently was stuck in phase II for original SARS-cov-19 strain.
Each individual investor should always consider their own investment goal, risk tolerance, investing span and objectives for their investment positions. Investing in securities involved the risk of total losses. Consulting with financial professionals is always recommended.
03/24/2022 - Moderna Inc. (MRNA)
Increase the position of MRNA to 17% of the portfolio(III)
Caution: Concentration risk should be considered seriously relate to significant loss, financial burden, tolerance of risk, investment objective before investing heavily in one company. More information for concentration risk on investment from FINRA.
03/15/2022 - Moderna Inc (MRNA)
Increase the position of MRNA to 13% of the portfolio (III)
According the guidelines provided by Pfizer Inc and Moderna Inc, the estimated revenue of fiscal 2022 from vaccine sale will be at same level as in 2021. The assumption here is that the level of net income for 2022 should be similar to 2021. At current market price, Moderna is trading at approximate slightly above 2 times of its end-of-fiscal-2022 book value if the assumption is correct. From the prospect of value on balance sheet, we, in softwaterinvestment.com, believe the shares of MRNA are considered cheap for a long term investment.
03/01/2022 - Moderna Inc. (MRNA)
Increase the position of MRNA to 10% of the portfolio (III)
12/01/2021 - Moderna Inc. (MRNA), BioNTech SE(BNTX)
Repurchase back the shares of Moderna Inc and BioNTech SE. The amount to repurchase should be equal to the amount (dollars) sold on 11/05/2021
Consider equal amount (dollar) of investment for Moderna Inc and BioNTech SE
As the operator of softwaterinvestment.com, I apologize to investors here for the impulse, foolish, terrible and panic-like mistakes made on 11/05/2021. The decision to sell those shares of Moderna and BioNTech is not well thought out and is inconsistent with long term investment strategy, and is also against the original studies.
First mistake was that it was against original thought which led to study of MRNA and BNTX. Original thought was as
Global population: 7,800 million
Excluding population of China and Russia:
7,800 - 1,402 - 145 = 6,253 million (assume both countries will not use vaccines developed from other countries
6,253 * 70% = 4,377.1 million (hypothetically, 30% of population would not be vaccinated)
MRNA: 4,377.1 * 20% * 1.5 * $15.00 * 35% = $6,893.93 million
Assume MRNA got 20% of 4,377.1 million population vaccinated
Everyone got 1.5 doses annually
$15.00 per dose
35% of Net margin
Hypothetical revenue: $19,696.95 million
Hypothetical net income: 6,893.93 million
BNTX: 4,377.1 * 50% * 1.5 * $15.00 /2 * 35% = $8,617.41 million.
Assume Pfizer and BioNTech got 50% of the 4,377.1 million population vaccinated.
Everyone got 1.5 dose annually
$15.00 per dose
Pfizer and BioNTech split revenue equally
35% of Net margin
Hypothetical revenue: $24,621.18 million
Hypothetical net income: $8,617.41 million
Those numbers led to the belief that MRNA and BNTX are not overvalued and are good opportunities for investment
One of the original thoughts is assuming COV-19 will last beyond 2022. No pandemic is a good thing, but the terrible reality creates such a situation which leads to this conclusion. And, the real situation today cements the original thought playing out as it was.
The mistake is derived from the thought that the assumed 70% of 6253 million population will be affected by COVID-19 pills from Merck and Pfizer; however, the reality is probably the opposite. Instead, the pills and other treatments should be able to help the gap of assumed unvaccinated 30% of 6253 million population and break-through cases.
Hence, the sale on 5/11/2021 is unwise.
Second mistake is the sale of MRNA and BNTX causes unnecessary short term capital gain with a probable higher tax bracket. Such tax is unnecessary and costly.
Third mistake is the repurchase back actually increases the cost of investment and misses the window of opportunity. The estimated loss of opportunity is about 40% which is about a more than 2-year gain for the S & P 500 index in average circumstances.
Repurchase & Equal Weight
More than 100 years of experience from Pfizer in the pharmaceutical industry and its global network provides tremendous help to BioNTech from global clinic trials, material procurement, production, distribution and connection with other pharmaceutical companies. Their partnership provides more benefit to BioNTech than what Pfizer gets
Even Moderna provided the first dose example, Pfizer’s well established network of global partners accelerates through all stages of processes.
Moderna is getting far behind on clinical trials of every age group. Moderna will get the final answer from FDA beyond 2021 for its vaccine for the age of 5-11. However, BioNTech-Pfizer vaccine got FDA emergency approval for age of 5-11 on 10/29/2021.
Moderna encounters more difficulties to scale up material procurement, production and distribution of vaccines even Moderna’s vaccine has better tolerance for storage.
The advantages BioNTech got from Pfizer is very obvious now. Comparing the financial results between MRNA and BNTX for the past three quarters, BNTX has better results from revenue to net income, especially the delivered doses of vaccines. BNTX (50% of total delivered by Pfizer and BioNTech) has delivered 50% more doses than MRNA did.
However, Moderna will have a better global network than BioNTech after the struggle Moderna encountered these days.
Consider an equal weight investment for both MRNA and BNTX due to the fact that BNTX gets the extra benefit from PFE.
The focus will be on the subject of necessity for booster shoots beyond 2022 to control COVID-19. It looks like we as human beings will have to live with COVID-19 as it becomes an endemic disease. Will an annual booster be required to maintain a dynamic constant state of endemicity? It should be clearer in 2022.
Again, apology for the cost and anxiety of the sale on 5/11/2021.
11/05/2021 - Moderna Inc. (MRNA) , BioNTech SE(BNTX)
Reduce current position 30% for Moderna Inc and BioNTech SE due to the competition from PAXLOVID, a high efficacy pill against hospitalization or death of COVID-19
Due to the reason that PAXLOVID's 89% efficacy against hospitalization or death of COVID-19, COVID-19 vaccines will be encountered by more competitions which are pills and can be taken by patients at home.
But, why only reduce 30% of current holding of MRNA and BNTX each and not more?
Reasons:
Vaccine is a preventive medicine which is more efficient to against spread of COVID-19 and being hospitalized. It is a personal choice either preventing from sick or be sick & treated.
Vaccination is cheapest option to against COVID-19 comparing other treatments. The New York Times reported that U.S. government will pay for the treatment (the second cheapest) $700 per course for pills from Merck and Pfizer (link). In the future, how are employers, insurers and patients going to pay for the treatment if government stops picking up the bill?
PAXLOVID treatment must be taken at early stage of COVID-19 infection (within 3-5 days of symptom onset, earlies the better). to be effective same as monoclonal antibodies treatment.
This a win for Pfizer even it is a lose to Moderna Inc and BioNTech SE.
But it is a big win for science and human kind.
11/04/2021 - Moderna Inc. (MRNA)
It is a out-of-expectation disappointed quarter.
From past experience, there are going to have waves of downgrades and target-price reduction for Moderna Inc from analysts within several weeks in the future. Each downgrade and target-price reduction is going to put downward pressure on the stock price of Moderna Inc, and it will depress the performance of whole portfolio. Also, fear of uncertainty will be in play.
It is more obvious now that Moderna's capacity to quickly scale up in global reach has hit another road block. That lack of global network and experience has been dragging down Moderna's performance on mass scale of clinic trials and now logistic on production and distribution. Unlike Pfizer, a one hundred and seventy two years old company who has well established global network, its performance on clinic trials, production and distribution has been smooth without much of hiccup. And, BioNTech, Pfizer's partner in vaccine developments, does not have to worry about such problems that Moderna encounters now.
In facts, those drag-down will have significant impact on Moderna Inc's revenue and income; hence, reduced financial strength definitely has negative effect on future development of the Company. But comparing a year ago, Moderna Inc has brighter future ahead.
Beside those bottlenecks, the fundamentals of Moderna Inc has not changed. Its advantage on researches and developments of sciences and medicines may have and should have advanced due to its strong financial boost from sale of Covid-19 vaccines.
Its short term and medium term outlook is dimed slightly, and its stock price will react accordingly.
However, its long term prosperity have not change much. React wisely with stock price fluctuation.
Conference call for 3rd Quarter of 2021 when it is available.
08/15/2021 - Valuation
Moderna Inc (MRNA) and BioNTech SE (BNTX ADR)
Valuation, a complex, subjective and often confusing processes and products, is very much in every security analysts' mind. There are so many steps and items to be considered in order to arrive a conclusion, especially the items in crystal ball. There is always a little difference in each step of valuation processes among analysts. The result of little difference adds up to big difference when the conclusion is reached. For the examples of Moderna Inc and BioNTech SE, the gap of difference of analysts' target price is about $300-$400 dollar per share. The target price is in the range of $463-$83 per share for Moderna Inc and in the range of $451 to $133 for BioNTech SE.
Hypothetically, the stock price of MRNA and BNTX should have been traded below $100 or even lower if inoculation is close to 100% in U.S. and Globe. The reason is that Cov-sars-2 would have difficulty to find a host to spread; therefore, there will be no need of Covid-19 vaccine and revenue from vaccine will drop to zero. The price of MRNA and BNTX should and would have gone back to pre-pandemic level. But, how about billions of cash in their balance sheet? We will need more crystal balls. Adding another valuation/target price will only add more confuse into the pot.
The business development of MRNA and BNTX are important and so as evolving of cov-sars-2 and their variants. Paying close attention to what cov-sars-2 have to say and keep saying to human being is much more important than what analysts have to say.
There are few quarterly update in financial data for MRNA and BNTX.
Also the news release from the companies for their latest development for vaccines, Moderna and BioNTech.
07/02/2021 - Moderna Inc
In studies of Moderna Inc, effort of trying to find any patent related to LNP yields no result. However, Moderna has been experimenting with various combinations of formulas of LNPs without specifying the ratio of contents. Instead of filing separate applications for LNPs, Moderna has been including LNP formulas within other patent applications. Information regarding LNP in those patent applications may duplicate in some ways between applications. Even though those vague formulas of LNP are included in Moderna’s vaccine or other patents which are not LNP, the percentage of ingredients used in LNP formulas are consistent with the description in both patents US20100324120A and US 8,058,069B2 which are owned by Arbutus Biopharma.
On 07/24/2020, Moderna stated that mRNA-1273 is not incorporated with LNP from Arbutus. Also, Moderna did not pay any royalty or fees related to LNP used in mRNA-1273 to Arbutus according first quarter financial report of 2021 from Arbutus
The following are U.S. patents which involve the description of LNGs used in experiments though some descriptions are stated in claims of patents.
United States Patent: 10,022,435.
United States Patent: 10,973,917. Claim 1, Claim 10, and Claim 20-27
United States Patent: 10,925,935. Invention claims
United States Patent: 10,695,419:
United States Patent: 11,003,366. Many lipid experiments. 2.5% PEG
United States Patent: 10,709,779. 0.5% - 3.0% PEG
United States Patent: 10,383,951. 1.0% - 3.5% PEG
06/28/2021 - CORRECTION ON Moderna Inc and BioNTech SE
The correct increased amount to invest in Moderna and BioNTech should be as following
Increase the position of Moderna to 12% of the portfolio (Portfolio III)
Increase the position of BioNTech to 8% of the portfolio
Instead of
Increase the position of Moderna to 18% of the portfolio (portfolio III)
Increase the position of BioNTech to 12% of the portfolio.
information for both companies is updated
06/23/2021 - Moderna Inc (MRNA) and BioNTech SE (BNTX ADR)
Increase the position of Moderna to 18% of the portfolio (portfolio III)
Increase the position of BioNTech to 12% of the portfolio.
information for both companies is updated
06/02/2021 - Moderna Inc (MRNA) and BioNTech SE (BNTX ADR)
Initiate a 5% position for Moderna Inc (MRNA)
Initiate a 2% position for BioNTech SE (BNTX)
Both companies came out on top in the race to create COVID-19 vaccines defeating globally established pharmaceutical companies
WARNING:
Softwater Investment has troubled tracking records for investing in the medical industry. The following is the list of past investments:
Achaogen Inc: Bankruptcy (Chapter 11), totally lost.
Insys Therapeutics Inc: Funder and executives were arrested and charged with RICO conspiracy and wire fraud. Eventually, it went bankrupt. Lose more 60% of investment
Valeant Pharmaceuticals: Pricing scandal, heavy debt. Recovered some losses.
PDL BioPharma: Attained very little gains.
Sirtex Medical Ltd: Gained fairly.
Even COVID-19 vaccines are successful products, both Moderna and BioNTech are the companies with only one successful product which means both companies have to prove they are worthy of advanced researches, advantageous technologies at this price. And that means investment in both companies involve more risks than average.
Why should Moderna and BioNTech be two good choices of investment?
The first reason to invest in Moderna and BioNTech is low valuation. However, the low valuation is very subjective and is mainly dependent on the opinion on how long vaccination is needed. In other words, how long/how many years can Moderna and BioNTech keep producing COVID-19 vaccines for the need to vaccinate the population.
The subjective valuation is fair now or even overvalued if the belief of the need of COVID-19 vaccines will subside beyond 2021/2022, or COVID-19 will disappear on earth, or durability of effective neutralizing antibodies will last many years to come. On the contrary, if the conclusion is that COVID-19 vaccination is necessary every year to contain the spread of COVID-19, the price paid for the shares of Moderna and BioNTech is low and has a distance to run from here.
The second reason is the competitive advantage of mRNA technologies. mRNA technologies from both Moderna and BioNTech have demonstrated their advantages over traditional vaccine developments. They are able to come out on the top at this race defeating Johnson and Johnson, AstraZeneca, Merck or even Pfizer (if Pfizer had not partnered with BioNTech. Of course, BioNTech couldn't have done it without Pfizer's global reach and billions of dollars of financial support).