It’s long been speculated that artificial intelligence (AI) and quantum computing could rapidly speed up advancements in many areas of science and technology, as both are able to parse massive amounts of information to gain pattern-based insights far faster than humans can. In the past, this has rarely come to fruition because it’s difficult to direct that much computing power in a way that can yield the desired results.
Now, Moderna (MRNA) and International Business Machines (IBM) are putting those theories to the test to see just how effectively AI and quantum computing can accelerate the development of new therapies. On Thursday, the two companies announced they are teaming up to allow Moderna access to IBM’s quantum computing systems and generative AI model so that the innovative biotech can advance mRNA technology, which was at the core of the company’s blockbuster Covid-19 vaccine.
“We are excited to partner with IBM to develop novel AI models to advance mRNA science, prepare ourselves for the era of quantum computing, and ready our business for these game-changing technologies,” said Moderna CEO Stephane Bancel in a statement.
Despite its dirt-cheap price-earnings ratio of 7.09, many investors are bearish on Moderna due to the expected drop-off in its Covid-related revenues, which make up the vast majority of its income. Declining revenues are undoubtedly a powerful indicator that the stock price won’t likely be outperforming any time soon.
However, I think the market is underestimating how much the cash from Moderna’s Covid therapies can help boost its research and development efforts in the long run. There is never a guarantee that a developer of pharmaceuticals will be able to create a single blockbuster, much less more than one, but Moderna is only just beginning to tap into the possibilities of mRNA technology. The company has lofty goals to develop life-saving vaccines for cancer, heart disease and untreatable conditions, and just one more success could send the stock soaring again.
Assessing Moderna’s pipeline
Vaccines may not have been Moderna’s original area of focus, but they are where the company has had the most success thus far. Since the company was already trying to develop a vaccine for another Coronavirus, Middle Eastern Respiratory Syndrome (MERS), when Covid-19 became a global problem, it was in a prime position to pivot its focus.
Now, several of the 48 candidates in Moderna’s pipeline is a vaccine candidate for respiratory syncytial virus, or RSV. RSV doesn’t get much attention because it’s even less deadly than Covid, but it can cause more serious conditions such as bronchiolitis and pneumonia. Moderna also has a Phase 3 influenza vaccine candidate which trials have shown to be more effective against some strains than an approved vaccine. Other vaccine candidates for viruses that affect public health include ones for Zika and Nipah.
Moderna also has several latent vaccine candidates for viruses such as cytomegalovirus (CMV), Epstein-Barr virus (EBV), human immunodeficiency virus (HIV) and varicella-zoster virus (VZV), which remain in the body and can lead to lifelong medical complications. The company is in the process of enrolling participants in its Phase 3 trial for the CMV vaccine candidate.
Moving on to treatments that are earlier on in the development process, Moderna is working on a personalized cancer vaccine for Melanoma to be used in conjunction with Merck’s (MRK) immunotherapy drug Keytruda. The vaccine would be administered after complete resection to prevent further formation of cancer cells. The FDA has granted the investigational treatment Breakthrough Therapy Designation to expedite the development and review process.
In cardiovascular, Moderna is working on developing novel mRNA medicines to address significant unmet needs of heart failure patients. Its first major step in this area is a drug candidate that is designed to produce the naturally occurring cardioprotective hormone relaxin.
AI, quantum computing and mRNA
As we can see from Moderna’s pipeline, there are a wide variety of ways in which mRNA technology could potentially be utilized to cure and prevent diseases and improve health outcomes. If that’s the case, then why was there so much skepticism about its viability before Covid vaccines proved its potential?
That’s because, rather than utilizing the memory of the immune system, mRNA-based therapeutics basically reach into the body and tell particular cells to start making certain proteins by sending mRNA messages into them.
This means that, while there are arguably a lot more possibilities with mRNA therapies, the discovery process is far more data-intensive and prone to trial and error. This is why AI and quantum computing are uniquely valuable to mRNA research.
According to Moderna and IBM, AI can help speed up the research process by providing insights on “the characteristics of potential mRNA medicines.” Quantum computing, meanwhile, has the ability to handle complex problem-solving by harnessing the quantum property of superposition. It’s also much faster than traditional computing; problems that might have taken traditional supercomputers longer than an entire human lifetime to solve are possible within just a tiny fraction of the time using quantum computing. According to Life Science, quantum computing is about 158 million times faster than the most sophisticated supercomputer in the world.
Moderna is at the cutting edge of mRNA therapy development, and its new partnership with IBM gives it access to AI and quantum computing technologies that could play a key role in speeding up its progress. The company’s stock has suffered because sales from its first big blockbuster are beginning to fall off, which puts it solidly in undervalued territory, but only if we assume that the company will eventually get more of its treatments approved. That’s the big risk with any biotech or pharma stock, though – investors can either benefit from future breakthroughs, or see their shares plummet on a pipeline in limbo.
Originally published on GuruFocus.com