The specter of RFK Jr. has investors fretting about a onetime vaccine wunderkind

Analysis by Allison Morrow, CNN

New York (CNN) — In the chaotic early days of the pandemic, Wall Street scrambled to place bets on the companies that looked the likeliest to thrive in the uncharted waters that were rising all around us. The early winners won big — especially the WFH plays like Zoom and Peloton, and, of course, vaccine makers like Pfizer and Moderna.

All of these stocks have all had a rocky path back to “normal.” (Heck, who hasn’t?) But perhaps none more so than Moderna.

Here’s the deal: The Cambridge, Massachusetts, company began as a tiny startup in 2010 and later became the biggest US biotech IPO in history in 2018. Wall Street was all in on Moderna’s mRNA research, even though Moderna didn’t have a single product on the market at the time and in fact didn’t plan to have one until 2025 at the earliest.

The pandemic upended that timeline. In the spring of 2020, the US government tapped Moderna to work on Operation Warp Speed (honestly, great name), and in just nine short months Moderna, Pfizer and BioNTech had begun shipping hundreds of millions of vaccines.

When Moderna’s stock price peaked in August of 2021, it was up 2,000% from its IPO. But the stock has since fallen 90% from its peak, and Bank of America analysts this week said they think it has farther to fall.

While noting it’s “a tough time to be a vaccines company” (more on that in a moment), Moderna is burning cash on research and development and, by its own guidance, won’t be cashflow positive until 2028, the researchers wrote.

“There are just too many layers of uncertainty at present,” they wrote. Moderna’s Covid vaccine remains the primary driver of its revenue, and its other vaccine, one for RSV, is “not likely to be a major player.”

Unsurprisingly, then, the short-sellers are piling in hard. Moderna now ranks among the top five most shorted stocks in the S&P 500 — meaning investors are betting on the stock to fall, according to a report released Thursday from S3 Partners. (Moderna told CNN in an email it doesn’t comment on stock movements or analyst coverage.)

“Moderna’s declining stock price, rising short interest, and increased implied volatility reveal an evolving risk narrative,” the S3 report concludes.

In other words, investors are worried that Moderna could end up a one-hit wonder, especially if the incoming Donald Trump administration manages to install vocal vaccine skeptics like Robert F. Kennedy Jr. in positions of power.

Though to be fair, that’s a risk for all vaccine makers.

A month ago, when Trump announced RFK Jr. as his pick to head the Department of Health and Human Services, shares of prominent vaccine makers including Moderna, Pfizer and Novavax, fell across the board. Kennedy has been one of the country’s most prominent anti-vaccine conspiracy theorists and holds such fringe views that 77 Nobel laureates got together to plead with senators to oppose his appointment to HHS. (When my CNN colleagues reported that news Wednesday, a spokeswoman for Trump’s transition team said that “Americans are sick and tired of the elites telling them what to do and how to do it,” and that “Mr. Kennedy will enact President Trump’s agenda to restore the integrity of our healthcare and Make America Healthy Again.”)

No one knows yet how far RFK Jr., if confirmed, would go to discourage or limit vaccines, but the dip in pharma stocks signals Wall Street isn’t super optimistic.

The-CNN-Wire
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