Moderna (MRNA) began trading on the S&P 500 on Wednesday, replacing Alexion Pharmaceuticals Inc. (ALXN), and the stock rose 4.48% in its debut.

The stock has soared amid the pandemic after its vaccine became instrumental in the fight against coronavirus.

Moderna stock has “taken on a life of its own,” Michael Yee, Managing Director and Senior Research Analyst at Jefferies, told Yahoo Finance (video above). “It's priced in a huge amount of assumptions over the next ten years that haven't played out yet. People believe it’s the Tesla of biotech.”

That the biotech firm would be so well-recognized and valued at over $113 billion was no sure bet. For those who invested early in the company, that wager paid off.

"Think about how fast they came up with nothing a year ago, and all of a sudden, they're doing $21 billion and have injected hundreds and hundreds and hundreds of millions of people with their drug safely," Yee said. "That's a pretty big accomplishment."

Moderna's rise to recognition

The Cambridge, Massachusetts-based biotech company was founded in 2010 and spent its first two years in stealth mode developing drugs using messenger RNA (mRNA).

The promise of mRNA — what Moderna calls "the software of life" — in pharmaceuticals has been huge. Modified mRNA teaches cells how to produce the proteins needed to fight and prevent infection. By altering the four letters in an mRNA sequence, this new class of drugs can, in theory, target a wide range of illnesses. The mRNA platform also promises to accelerate the time it takes to select, develop, and manufacture vaccines.

On these high expectations, Moderna achieved a billion-dollar valuation within two years. Initially, the company focused its efforts on treatments for cancer, cardiovascular issues, and some rare diseases. However, developers were embattled with the problem of delivering mRNA to cells — too-strong doses set the body's immune system against the drug while too-weak doses proved ineffectual in fighting disease.

Over time, the company shifted to pursuing vaccines, which CEO Stéphane Bancel believed would demonstrate the viability of the technology. Moderna had nine vaccines that made it to clinical trials, although none achieved liftoff.

That changed when a deadly global pandemic hit, kicking off a vaccine race in the U.S. between Moderna and pharmaceutical titans like Pfizer (who also developed an mRNA vaccine in partnership with BioNTech) and Johnson & Johnson.

The company's decade of research iterating on the basic science behind mRNA proved consequential in its success in developing a coronavirus vaccine in record time. On January 11, 2020, Chinese scientists revealed the genetic sequence for SARS-CoV-2. By February 24, 2020, Moderna shipped the first doses of its mRNA coronavirus vaccine to the NIAID to begin phase I trials. And in December of 2020, phase III trials demonstrated 94.1% efficacy against symptomatic COVID-19. The FDA subsequently approved Moderna's vaccine for emergency use in the United States, Canada, and the European Union.

Moderna's COVID-19 vaccine marks its first — and only — commercially available product. On the back of strong demand for the vaccine, the company recorded its first-ever profitable quarter in Q1.

The company currently has 23 other vaccines and therapeutics in its pipeline, including vaccines for the flu, HIV, and Cytomegalovirus (CMV), which causes birth defects in newborns, all using the same mRNA technology that has seen validation from the rollout of the COVID-19 vaccine.

"I think depending on your long-term outlook of what this company could do and all of the pipeline drugs that theoretically could come about over the next 10 years, based on those prospects, it could and should be one of the largest biotech companies in the world," Yee said.

A bull market in biotech

The biotech industry has seen a phenomenal run-up in the last several years, and any pullbacks in the last six months should be viewed in that context, Yee also noted.

"It has been one of the biggest bull markets in biotech in the last three years," he said, citing high valuations as well as record numbers of financings, investment, and IPOs.

Going forward, Yee expects more M&A activity. "Some of the large companies which are more mature, I think, are having some struggles. And the way they've solved that is often by buying smaller companies," he said. "In the big picture, things have still been very good for biotech."

Grace is an assistant editor for Yahoo Finance and a UX writer for Yahoo products.

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