Moderna (NASDAQ:MRNA) stock has collapsed from its all-time high. However, the company is once again on the move — in a good way. The stock is up 68% over the past six months, with partnerships around artificial intelligence (AI) and positive cancer trial data garnering investor interest. Personally, though, I’m still unconvinced that these developments make MRNA stock a buy and require more data before I make a decision. For now, I remain neutral.

The Moderna and OpenAI Partnership

In April, Moderna and OpenAI said they were deepening their partnership, announcing expanded access to ChatGPT Enterprise for Moderna’s workforce. This collaboration empowers Moderna staff to develop customizable GPTs (generative pre-training transformers) designed for specific purposes, ranging from data analysis to image creation.

After a successful trial period, which saw the creation of 750 custom GPTs and widespread adoption among employees, Moderna is now set to roll out ChatGPT Enterprise to thousands of its staff members. According to OpenAI, one of the most important GPTs being used by Moderna staff is Dose AI. The GPT can help clinical trial teams understand the optimal dose to use by reviewing and analyzing clinical data.

“The Dose ID GPT has the potential to boost the amount of work we’re able to do as a team. We can comprehensively evaluate these extremely large amounts of data, and do it in a very efficient, safe, and accurate way, while helping to ensure security and privacy,” Meklit Workneh, Director of Clinical Development at Moderna, said in a statement.

ChatGPT offers huge potential and can aid in various tasks from refining cooking skills to drug discovery. Its range of applications is huge. However, ChatGPT doesn’t thoroughly explain its calculations and doesn’t provide sources, potentially creating issues that will need to be overcome. It’s also true that the benefits could take a while to become apparent.

Moderna’s Cancer Hopes

For some time, I’ve thought of Moderna as uninvestable. The pandemic gave this mRNA-driven pharma company a unique opportunity to generate revenue. However, the COVID-19 vaccine, Spikevax, was its only marketable product, and it remains that way. As such, investors should rightly be concerned about future revenues. The company reported $2.8 billion of Spikevax sales in the fourth quarter of 2023 — significant, but down massively from the pandemic.

Cancer vaccines are one part of the company’s extensive pipeline, and mRNA-4157 is potentially one of the most exciting parts of the portfolio. In a Phase II trial, patients either received immunotherapy treatment pembrolizumab — a recognized standard of care post-surgery — or pembrolizumab combined with mRNA-4157.

The study provided two positive headline data points. Firstly, it confirmed the favorable safety profile of the combination therapy. Moderna reported that there was no notable increase in toxicity or adverse effects for the combined treatment versus the pembrolizumab monotherapy.

Secondly, recurrence-free survival data demonstrated that the combination treatment was more effective than the pembrolizumab monotherapy. Moderna noted that 78.6% of patients had no cancer recurrence 18 months following the treatment compared with 62.2% in the control group who received the monotherapy.

mRNA-4157 is designed to treat patients with solid tumors in the head and neck. The announcement of the preliminary data sent the stock to a three-month high in April.

Moderna’s Patent Dispute

While investors were excited by the trial announcements, some analysts have highlighted a potential sticking point. Moderna uses intellectual property developed by Genevant Sciences and Arbutus Biopharma (NASDAQ:ABUS). The companies hold the patents for lipid nanoparticles (LNP). These are vehicles for gene delivery that accommodate both nucleic acid and protein. In other words, they allow mRNA vaccines to evade the body’s immune system.

This technology allowed Spikevax to succeed and is central to other pipeline projects, but Genevant Sciences and Arbutus Biopharma claim that Moderna used the LNP without properly compensating the two companies or gaining licensing. The allegations have been validated by the United States Patent and Trademark Office.

Moreover, Genevant licenses the technology to other companies, proving that the patents are enforceable. A decision against Moderna could result in billions of dollars of compensation, worsening the company’s negative cash flow position.

Is Moderna Stock a Buy, According to Analysts?

Twilio stock comes in as a Moderate Buy based on the ratings of 18 analysts in the past three months. There are currently eight Buys, seven Holds, and three Sell ratings. The average MRNA stock price target is $130.29, with a high forecast of $214 and a low forecast of $75. The average price target represents 1.3% downside potential.

The Bottom Line on Moderna Stock

Moderna is developing a highly exciting and potentially commercially attractive pipeline of drugs and treatments using mRNA technology. There’s great hope for its vaccine against solid tumors in the neck and head. However, these developments are overshadowed by claims from Genevant Sciences and Arbutus Biopharma that Moderna used their LNP technology without licensing. Given Moderna’s current situation, I find it very far to get behind the stock. Therefore, I’m neutral on it.

Disclosure