After two years of stagnation, stock prices are soaring.
Moderna (MRNA 1.90%) Artificial intelligence (AI) is not new. The biotech, best known for its multibillion-dollar coronavirus vaccine, has been using this hot technology for years to save critical time in the lab.
For example, Moderna uses AI to generate mRNA for researchers to use, eliminating the need to manually create mRNA to run experiments.
And last year, we signed a contract. international business machine Advance biotechnology research using AI and quantum computing tools. CEO Stéphane Bancel has frequently spoken out about his commitment to the technology, even establishing an AI academy to educate employees on how to incorporate AI into their daily work.
But the latest AI announcement may be the biggest yet. A few weeks ago, Moderna announced that it was expanding its collaboration with OpenAI and that the collaboration is bearing fruit. The company says not only does he expect AI to help advance the drug discovery process, but the technology is already increasing efficiency across the company.
This biotech company could be a future AI winner, but is the stock worth buying? Let's find out.
Image source: Getty Images.
Moderna's vaccine revenue peaks
First, a quick summary of Moderna's current situation: The company is making billions of dollars in revenue from its coronavirus vaccine, and at its peak, annual sales exceeded $18 billion.
But as we move toward a post-pandemic world, demand for vaccines is declining, and so is revenue. In the most recent quarter, management reported vaccine sales of $167 million and forecast full-year product sales of $4 billion.
But Moderna never planned to be a single-product company, and the company's solid late-stage pipeline shows it has what it needs to continue moving toward its goals. Showing. Bancel aims to launch up to 15 products over the next five years, including vaccines in the respiratory field, such as treatments for respiratory syncytial virus (RSV) and influenza, and other therapeutic areas. It states that this includes products such as
Moderna says these products could generate up to $30 billion in annual revenue in a few years. Even if the company achieves part of the way to this goal, it could potentially see significant revenue growth over time.
Meanwhile, the company is focused on investing in AI, which leads to a collaboration with OpenAI. Moderna implemented AI across all departments to increase efficiency. In just a few months after signing on to ChatGPT Enterprise, the biotech company has built over 750 large-scale language models for use in a variety of tasks, including legal matters and payment processes.
Selecting the optimal vaccine dose with AI
The technology is also changing the lab, with ChatGPT's analytical tools helping Moderna choose the optimal vaccine dose for clinical trials, for example. This is a critical decision that will determine the success or failure of a particular candidate's development. Therefore, this will save you time and increase your chances of success.
Recent and ongoing investments in AI are already paying off, reducing Moderna's need for purchased services and outside consulting, which led to a 10% reduction in selling, general and administrative expenses in the first quarter.
Given that the company has just started working with ChatGPT Enterprise, the efficiency gains and cost savings are still in the early stages, and there may be more to come. At the same time, Moderna's use of the ChatGPT tool and partnership with IBM could also improve the drug development process.
All of this means that your business should at least become more efficient and reduce costs thanks to your investments in AI. In the best-case scenario, companies could develop better products and bring them to market faster. Either way, we aim to win.
Should you buy Moderna?
But is this a good buy for Moderna? I'm not going to buy stocks just to invest in AI. It is also important to consider the biotech pipeline and the potential to bring some of these candidates to market. As mentioned earlier, these metrics look positive for the company.
Investors may now be starting to focus on this long-term potential. After several years of decline, the stock is up about 40% this year. Positive momentum could resume and now is a great time to enter this innovative biotechnology and benefit from all potential products that could drive sustained revenue growth.
