Moderna Inc.'s shares soared by as much as 177% in a single day, leading to estimated losses of $5.5 billion for short sellers who had bet against the company. This dramatic increase was triggered by the announcement that Moderna's personalized mRNA cancer vaccine, developed in partnership with Merck & Co., successfully reduced the recurrence of melanoma in a late-stage trial. According to S3 Partners LLC, this surge pushed the year-to-date mark-to-market losses for Moderna short sellers to approximately $7.7 billion.
Matthew Unterman, managing director at S3 Partners, described the move as "exceptionally painful" for Moderna shorts, emphasizing that it significantly alters the risk/reward profile for those maintaining bearish positions. The company's stock had already seen a 114% gain earlier in the year, fueled by hopes for its flu vaccine diversifying revenue away from its declining COVID immunization business. Prior to this, Moderna's shares had experienced four consecutive years of losses, falling nearly 94% from their 2021 peak.
Wall Street analysts reacted positively to the trial results. Needham analyst Joseph Stringer called the melanoma study a "landmark win" for Moderna, suggesting it could establish oncology as a major growth driver. William Blair's Myles Minter upgraded his rating to outperform from market perform, noting that Moderna now has a clear path to revenue diversification beyond its COVID business. The scale of the surge, coupled with the fact that short interest had already decreased from 20% to about 14% this year, could compel more bearish investors to cover their positions, potentially driving further upward pressure on the stock.
The successful trial involved 1,137 patients whose melanoma had been surgically removed. The personalized mRNA cancer vaccine, intismeran autogene, works by analyzing a patient's tumor to identify specific mutations and then training the immune system to target these cancer cells. When administered alongside Merck’s pembrolizumab, the treatment significantly reduced the risk of melanoma recurrence. This positive result provides strong evidence for the potential of mRNA technology in cancer treatment and offers a new growth trajectory for Moderna, reducing its dependence on COVID-19 vaccine revenues.
