Moderna shares sink up to 25% after cancer vaccine data appear early

What happened

Moderna and Merck were due to unveil detailed Phase 3 results for intismeran autogene, their tailor-made melanoma vaccine, at the European Society for Medical Oncology (ESMO) congress in Madrid on Saturday. On Thursday, figures surfaced early. Bloomberg reported that unverified accounts on X shared a report credited to Oncology Central showing a 42% cut in recurrence or death, though the link it gave was not live. 24/7 Wall St. said the report was posted on a medical news site around midday and soon removed. Moderna shares dropped as much as 25%, CNBC and Bloomberg reported. The companies then released the full numbers later in the day.

What it means

The data themselves were good. In the trial of 1,137 patients whose melanoma had been surgically removed, adding the vaccine to Merck's immunotherapy Keytruda lowered the risk of the cancer returning, or of death, by 42% compared with Keytruda alone, the companies said. The risk of the cancer spreading to distant organs, or death, fell by 38%. After a median follow-up of 24.6 months, 82.2% of patients on the combination were alive and free of recurrence at two years, against 70.0% on Keytruda alone. CNBC said the figures looked positive relative to Wall Street expectations.

So why the sell-off? Expectations were extremely high. Even after Thursday's drop, Moderna stock was still up more than 500% this year, a run CNBC linked to high hopes for this product, so even strong results had to clear a very high bar. An earlier Phase 2b study had shown a 49% reduction in recurrence or death, a higher number than the new one, although Bloomberg noted that the earlier trial involved different patients over a different period, so it is not a like-for-like comparison. The companies also said the benefit was similar between the two groups during the first six months, with a 58% lower risk of recurrence or death after that point in a pre-specified analysis.

The vaccine matters a great deal to Moderna. Its commercial business today rests on five approved infectious-disease vaccines, including Covid-19 and seasonal flu shots, and intismeran is its main bet on building a cancer business. The shot is being tested in nine Phase 2 or Phase 3 trials, including in lung, bladder and kidney cancer. Because each dose is made for one patient, production can take six weeks, though Merck CEO Robert Davis told CNBC the company thinks it can shorten that.

Some questions remain open. Overall survival data are not yet mature, though the companies reported a favorable trend, and serious treatment-related side effects were similar in both groups at 14.2% and 13.4%. The results have been accepted by The New England Journal of Medicine, and the companies say they are talking to regulators. Saturday's ESMO presentation and Moderna's investor event the same day will give doctors and investors their first detailed look.

The bull case

The Phase 3 trial delivered clear gains in keeping melanoma from returning or spreading and no new safety signals. A publication in a top journal and talks with regulators point toward a possible approval path. If the benefit grows beyond six months as the companies' analysis suggests, and the shot works in other cancers, Moderna could gain a second major business beyond infectious-disease vaccines.

The bear case

After a rally of more than 500% this year, Moderna's valuation assumed near-perfect results, and the 42% risk reduction is below the 49% seen in the earlier Phase 2b study, even if the two are not directly comparable. Overall survival data are still immature, six-week manufacturing could limit uptake, and regulators have yet to rule. Merck's own stock fell too, a sign that the market may now be scaling back hopes for the partnership's commercial potential.