How Life-Saving Technology Turns into Life-Changing Investment Returns

Dear Reader,

In our email a few days ago, we discussed the miraculous breakthrough known as messenger RNA (mRNA) technology that emerged as a silver lining of the pandemic.   

We talked about how the technology has been in the works for decades, but the COVID-19 vaccines developed by Moderna (MRNA) and the Pfizer (PFE)/ BioNTech SE (BNTX) partnership are the first time it has been effectively put to use.

What we didn't talk about is the massive amount of money still to be made from this.

Prior to the pandemic, the market research firm CB Insights estimated that the mRNA vaccine and therapeutics could reach a market size of $6 billion by 2025.

Well, it turns out those estimates were just a little low.  

• Moderna is forecasting $18.4 billion in vaccine sales in 2021.
• And Pfizer estimates it will generate $15 billion in revenue from vaccines this year.

In other words…

The first mRNA products ever created are expected to generate more than $33 billion in revenue in 2021.

That is more than four times CB Insights’ previous revenue projection for the entire segment by 2025.  

To be fair, no one could have predicted what took place in 2020. The pandemic led to all of the world’s top scientists and medical researchers focusing entirely on a single problem.

The scientific community was able to produce some of the most effective vaccines ever created in record-breaking time.

The breakthrough in mRNA technology was going to happen, but the pandemic undoubtedly accelerated its development timeline.

And since there are billions of people clamoring to get vaccinated, clearly these are highly unique circumstances.

So, the lowball estimates by CB Insights are very understandable.

But it shows just how hard it is to predict the impact of game-changing technologies, even for a market research firm with its finger on the pulse of the industry.

And when the power of technology isn’t fully appreciated, it creates an enormous opportunity to profit for savvy investors.

The breakthrough in life-saving mRNA vaccines created some potentially life-changing investment returns. 

Since the start of 2020, BTNX and MRNA went up 183% and 705%, respectively.

Before 2020, Moderna and BioNTech were both small-time companies unheard of by most people outside of the biotech world. Now, they are basically household names that boast market caps of $58 billion and $26 billion, respectively.

That puts Moderna in line with the top 125 largest companies on the S&P 500. And BioNTech is now larger than about half of the S&P 500.

And they aren’t the only vaccine makers bursting into the mainstream over the last year.

Despite the fact that neither CureVac (CVAC) nor Novavax (NVAX) have a product to sell, both of these late-stage vaccine developers are now large enough to be included in the S&P 500 index.  

Shares of CVAC were just listed in August, and they are already trading 489% above their IPO price of $16 per share. Shares of NVAX are up an astonishing 5,050% since the start of January 2020!

Needless to say, the vaccine market has attracted a lot of attention from investors over the last year.

According to the investment bank SVB Leerink, publicly traded vaccine developers gained an estimated $188 billion in market value between January and Decemeber of 2020.

These markets have undoubtedly minted many new millionaires… but things are really just getting started.

There are currently more than 520 ongoing clinical trials testing mRNA across more than 20 different types of diseases.

• Moderna is already working on vaccines for HIV and the seasonal flu.
• CureVac is working with the Bill and Melinda Gates Foundation to develop mRNA vaccines for rotavirus and malaria.
• There are over 145 ongoing mRNA trials for treating rare genetic diseaseas.
• Over 150 trials are investigating mRNA therapies for treating many different types of cancer.

Now that we know the mRNA technology works as an effective coronavirus vaccine, it’s time to figure out how many other diseases it’s capable of preventing and treating.

The first generation of mRNA vaccines is expected to generate over $30 billion in sales in its first full year on the market. Those sales numbers will cool off after the initial vaccination push, but the future is still extremely bright for mRNA technology.

And this is just one example of the revolutionary tech that is leading us into a new golden age in medicine.

The spotlight is currently shining on mRNA, but there are a handful of technologies that could have just as big of an impact on the world.

The best part is that the market is currently underestimating the potential of these new technologies, just like it did with mRNA.

So, there are many opportunities flying under the radar… it’s like being able to invest in mRNA vaccine companies back in January 2020.

Keep an eye out for our next email… in it, we’ll share where some of the next big breakthroughs in biotech are going to happen. 

Chris Wood
Chief Investment Officer Healthcare and Biotech

Jake Weber
Senior Editor