New Moderna cancer vaccine data spurs share rally

Dive Brief:

• An experimental cancer vaccine from Moderna and Merck & Co. continued to show promise in treating melanoma, with newly released evidence showing that a combination of the shot and the immunotherapy Keytruda kept more people alive and disease-free three years after surgery than Keytruda alone, the companies said Thursday.
• The updated data, from a Phase 2 trial that first read out a year ago, show study participants who received the shot and Keytruda had a 49% reduction in the risk of cancer recurrence or death when compared to those who received Keytruda alone. The apparent benefit is slightly bigger than the 44% risk reduction the companies reported a year ago, an increase one analyst said “generally mirrors what we have seen for other immune-therapies.”
• The shot, dubbed MRNA-4157, is leading a new wave of cancer vaccines, an approach that has historically proven ineffective. Newer shots may be more potent, though, because they can attack numerous mutated proteins in tumor cells and, through messenger RNA technology, be tailored for individual patients.

Dive Insight:

Merck paid Moderna $250 million for rights to mRNA-4157 just weeks before the Phase 2 trial generated initial data. The two companies first teamed up on the project in 2016, and the study results were so encouraging they launched a Phase 3 trial in July.

The latest update adds to the early promise already seen in Phase 2 testing. The companies said Thursday that the vaccine-Keytruda combination reduced the risk of “distant metastases” or death by 62% when compared to Keytruda alone, representing only a slight narrowing of the difference between the two since the last data report. 

Moderna’s shares jumped 12% following the announcement, spurred along by the belief among some investors that the partners might be able to seek approval based on the mid-stage data. The shot already has a Breakthrough Therapy designation from the Food and Drug Administration, which can help speed up drug reviews.

In a note to clients Thursday, though, Jefferies analyst Michael Yee cautioned that the FDA may want to see data from a larger trial because of mixed results in patients with certain mutations.

“We think [an accelerated approval] is unlikely,” Yee wrote. 

Leerink Partners analyst Mani Foroohar added that Moderna’s stock rally may not be sustainable, as the company’s “underlying fundamentals continue to erode.”

Those fundamentals center on Moderna’s primary source of revenue, the COVID-19 vaccine Spikevax, sales of which have been in decline since the heights reached during the pandemic. Pfizer’s 2024 sales forecasts yesterday, which sparked a stock selloff at the big drugmaker, are not likely to make investors more optimistic about Moderna’s outlook next year, Foroohar wrote.

For Merck, the drug combination is part of its strategy to extend the market exclusivity for Keytruda, which may become the biggest-selling drug in the world this year but faces the expiration of key patents in 2028.