A financial case study of Moderna deciding whether they will attempt to develop an mRNA-based COVID-19 vaccine. Also examining the choice between in house clinical trial management versus third party outsourcing to a Contract Research Organization (CRO). Open to other suggestions on this topic
Question1: What is the NPV of developing a COVID -19 vaccine? What are the IRR, MIRR, payback, discounted payback and profitability index? Do these measures indicate acceptance or rejection of the proposed vaccine?
Question 2: What happens to the NPV, IRR, MIRR, payback, discounted payback and profitability index if the developed vaccine is tested in house versus outsourcing to a Contract Research Organization (CRO)? What stage of development is most expensive? What can Moderna do to control expenses?
Question 3: What happens to the NPV if there’s competition? What are the worse, normal and best-case scenarios?
Question 4: How many vaccines will Moderna need to distribute to breakeven?