Context: An as yet, unidentified virus with respiratory symptoms is circulating in the South West DR Congo region of Kwango. It has affected at least 3 different towns, with 179 people now dead, from over 300 people infected. First cases were recorded in mid-November, with cases likely stretching back to late October. Things are moving quickly. Kinshasa with 17 million people, sits 3.5 hours drive from Kwango.

https://nypost.com/2024/12/04/us-news/a-mystery-disease-has-killed-179-mostly-teenagers-in-the-democratic-republic-of-the-congo/

What could it be? Kwango was identified in a 2020 research paper as an area at-risk of a potential zoonotic spillover event (see picture). The study found that bats in the area were infected with coronaviruses with high genetic similarity to existing human coronaviruses. Notably, while recent experience has exemplified the threat of coronaviruses from Asian bat populations, several coronaviruses that now constitute common colds, likely originated in ancestral African bat populations.

https://www.biorxiv.org/content/10.1101/2020.07.20.211664v1.full

What could we expect in coming days: The last time a substantive pandemic risk hit the market (bird flu), Moderna’s stock rose 40% in a short period of time (peaking at $166). This was despite there being no evidence of human-to-human transmission, H5N1 vaccines already available commercially from competing firms, and effective flu antivirals. Given this is unlikely to be a flu virus, Moderna will have a much more competitive edge, and we could expect to see a much stronger share price result.

https://www.reuters.com/breakingviews/moderna-stock-is-lone-omen-bird-flu-pandemic-2024-06-17/

Risk:

If this doesn’t turn out to be a pandemic risk, the downside risk is low. The news of this event only reached western media yesterday, and hasn’t materially affected prices yet. At the current price you are getting in on the ground floor. Additionally, RFK’s nomination has driven market sentiment of Moderna’s stock to just above cash, which mitigates the downside risk of negative trial readouts in coming weeks.

My position: 10000 shares at $41.90