Moderna Inc. was a niche biotech, little known beyond pharmaceutical industry insiders and companies similarly striving to decode messenger RNA for a medical breakthrough at the end of 2019. Enter 2020, when the coronavirus began dominating every facet of life and the economy — thrusting the upstart biotech into a position as the top performing stock among the largest pharmaceutical companies.
Shareholders of Cambridge, Mass.-based Moderna enjoyed a 434% return on investment in 2020, substantially beating the next best performer, Seagen Inc., which had a 53% return, according to an S&P Global Market Intelligence analysis. Moderna's market cap has climbed to $45.54 billion as of Jan. 7, with shares trading at $115 each at market close.
Moderna's vaccine, which prevents infection with the SARS-CoV-2 virus, was authorized for emergency use by the U.S. Food and Drug Administration on Dec. 18, and has since been approved in Canada, the EU, and other countries around the world.
"2020 was an incredible year ... my head is still spinning," Moderna CEO Stéphane Bancel said Jan. 5 at the Goldman Sachs Healthcare CEOs Unscripted Conference. "I don't think I've fully appreciated what happened in the last 12 months."
Bancel and his team will provide a further update on the company's pipeline beyond the coronavirus vaccine at the 2021 J.P. Morgan Healthcare Conference beginning Jan. 11, but the CEO said Moderna ended the year with $5.25 billion in cash on hand. With revenue now coming in from the vaccine, Bancel expects that number to go "way north" over 2021. That cash will likely be spent on the pipeline, building out programs in other vaccines, antibodies and cardiology, Bancel said.
Moderna may have captivated global headlines, but companies like Seagen brought in plenty of value for investors with interesting storylines of their own. Beginning the year as Seattle Genetics, the biotechnology company changed its name in October to reflect the transition from a Bothell, Wash.-based footprint to a company with assets being distributed globally.
Seagen signed a deal with Merck & Co. Inc. in September 2020 worth $725 million for two breast cancer drugs, including Tukysa for $125 million up front plus certain milestones.
Another top performer among the largest pharmaceutical companies was Eli Lilly and Co., which produced a COVID-19 treatment called bamlanivimab over 2020 and brought in a 31% return for investors. Cowen analyst Steve Scala expects 2021 guidance for Lilly to be dominated by contributions from the COVID-19 therapeutic treatment. The company raised sales guidance in 2020 by $500 million due to bamlanivimab, and Scala expects another $1.5 billion from the drug in 2021. Lilly's growth potential for 2019 through 2025 is among the best in pharma, according to Scala.
Regeneron Pharmaceuticals, Inc. similarly had a strong year with a COVID-19 treatment, bringing in a 29% return for investors.
The worst performer among large-cap pharmaceutical companies was Biogen Inc. with a negative 17.5% return. The Cambridge, Mass.-based company had a roller coaster year topped off by an FDA advisory committee's rejection of the Alzheimer's disease treatment aducanumab. The drug, which is attempting to break through a slew of high profile failures for therapies that address the underlying cause of Alzheimer's, is awaiting a March 7 decision from the FDA.
M&A drives overall winners
Miragen Therapeutics Inc. performed the best for investors across the pharmaceutical industry, with a 3,327% return. Shares of the Colorado-based biopharmaceutical company, which is developing a treatment for thyroid disease, popped in late 2020 after the strategic acquisition of Viridian Therapeutics Inc.
An acquisition also pushed Eledon Pharmaceuticals Inc., formerly known as Novus Therapeutics, to the second slot overall with a 2,555% return. The company bought Anelixis Therapeutics LLC in an all-stock deal in September 2020 after a strategic review spurred by the failure of an ear infection drug.
Novavax Inc. was another player in the race to find a vaccine for COVID-19, netting a $1.6 billion contract with the U.S. government to supply NVX‑CoV237 under Operation Warp Speed. Investors in the Gaithersburg, Md.-based company saw a 2,702% return.