Moderna and Merck announced on Wednesday that their personalized mRNA cancer vaccine, intismeran, successfully reduced the risk of recurrence and spread of melanoma in a late-stage trial. This major success in a new field of cancer treatment led to a significant surge in Moderna's shares, which climbed as much as 170% and added nearly $45 billion to the company's market capitalization. Merck's shares also rose by 12%, reflecting hopes that the vaccine will expand its oncology portfolio as its top-selling drug, Keytruda, faces patent expiration later this decade.
Analysts generally view these results as a significant win. RBC Capital Markets analyst Trung Huynh called it a "major win," and TD Cowen analyst Tyler Van Buren referred to it as a "landmark moment" and a "significant validation" of the underlying technology. William Blair analyst Myles Minter upgraded his rating on Moderna's stock, projecting that the company could eventually earn $5.4 billion in peak annual sales for melanoma alone from its 50-50 revenue split with Merck. BMO Capital Markets estimated a program value of $2 billion in unadjusted peak revenue for melanoma, with potential for $5.6 billion across multiple solid tumors, a new revenue stream given prior investor skepticism.
The initial data suggests that the combination of intismeran and Keytruda could become a new standard of care for melanoma, which accounts for the majority of skin cancer deaths. The treatment met its main goal by significantly extending the time patients lived without their melanoma returning, compared to Keytruda alone, and also reduced the risk of the cancer spreading. Dr. Jane Healy, Merck's head of oncology early development, highlighted the therapy's "clinically meaningful improvement" over Keytruda and its good tolerability, with side effects similar to other common vaccines.
However, some analysts have cautioned against the euphoric market reaction. Evercore ISI's Cory Kasimov noted that Moderna's new valuation "already prices in substantially more conviction than the data disclosed thus far supports." Leerink Partners analyst Daina Graybosch called the market reaction "overly optimistic," suggesting that the stock gains imply intismeran will generate far more in the adjuvant setting than Keytruda currently does, and raised concerns about higher manufacturing costs and the assumption of success in other indications. Detailed data from the Phase 3 study will be presented at a future medical meeting.
