Moderna stock narrowly avoided its worst trading session on record after leaked data for its cancer-vaccine candidate triggered a wave of selling. But were investors right to panic?
Moderna and partner Merck were set to present an expanded data set for their vaccine, intismeran autogene, at the annual meeting of the European Society for Medical Oncology (ESMO) this weekend. However, the embargo on the study was "breached," ESMO later confirmed, prompting the organization and the partners themselves to release the results on Thursday.
The late-stage trial centered on patients who were at high risk of their melanoma returning after it had been surgically removed. The vaccine, tailored to the mutations in each patient's tumor, was administered with Merck's Keytruda, while other trial participants received Keytruda alone.
The combined treatment reduced the risk of cancer recurrence or death from any cause -- known as recurrence-free survival -- by 42%. It also lowered the chance of distant metastasis or death by 38%, achieving a key secondary endpoint. These findings represent the first positive Phase 3 trial for an mRNA-based cancer therapy.
While the results received a warm reception from the medical community, they failed to generate a similar reaction on Wall Street. Moderna stock ticked up just 0.6% on Friday after sinking 18% on Thursday. Merck, meanwhile, fell 1.6% on Friday after closing down 1.8% the previous session.
Bernstein analysts described the selloff as a "sell the news event" in a research note Thursday, calling the data "meaningful validation of Moderna's individualized neoantigen platform." Wells Fargo, similarly, posited that the slump "may be overdone."
However, others conceded that the data -- while solid on their face -- may have fallen short of the most elevated expectations. BMO Capital Markets analyst Evan Seigerman noted that some investors were looking for a read-through to other tumor types. "These results are not enough to drive confidence amidst elevated expectations," he concluded.
More results are expected -- Moderna and Merck are testing intismeran in nine trials across various solid tumors.
Citi analyst Geoff Meacham similarly suggested that some investors were "assigning value to an effective-cure narrative," even though the 42% figure versus Keytruda alone was "a clinically meaningful advance" with consistent efficacy across all disease stages.
Investors sold anyway. Moderna's stock spiraled Thursday as the leaked data spread rapidly across social media. At its lowest point, shares fell more than 26% to $180.80, putting them on track for their largest single-day percentage drop on record.
One of the most widely circulated talking points was that the data fell short because Moderna didn't "cure cancer" -- a point Meacham acknowledged. Supporting that level of confidence likely would have required an effect exceeding the "paradigm-shifting" 0.40 hazard ratio achieved by Rasonque, Revolution Medicines' pancreatic cancer pill, which ignited its own investor frenzy earlier this year.
While the latest results establish intismeran as clinically relevant in melanoma, success in a relatively easier-to-treat cancer doesn't automatically translate to malignancies with different biology, Meacham wrote. He emphasized that additional positive studies "remain necessary to support the broader platform value previously embedded in shares."
Skeptical investors may have also seized on the 38% distant metastasis metric, which measures how well the treatment prevents cancer from spreading to other parts of the body or death. TD Cowen analyst Tyler Van Buren pointed out that the result was "less exceptional" than the benefit on lowering recurrence risk.
Ask Marjorie Green, head of Merck's oncology clinical trials, and she'll say the response was an overreaction.
"This to me is transformational therapy," Green told Barron's. "It really is practice-changing."
The study used an intent-to-treat analysis, which tracks every patient from the time they enroll, including those who dropped out or never received a dose. Green argues that evaluating progress beyond the initial six-month mark yields a much clearer picture.
Intismeran trains a patient's T cells -- a core part of the adaptive immune system -- to target cancer-specific abnormalities, and the body needs time to build a robust response.
"It does take some time to get T cells to recognize something as foreign," Green concedes. "It's not going to just be like turning on a switch and giving one shot and you're done."
The treated patients received their first dose of intismeran two months into the trial, which was followed by eight more doses at three-week intervals. Merck's presentation on Saturday will include modified analyses examining what happened after six months, Green says.
This may make the Phase 3 numbers look even better. At six months, the combined treatment reduced the risk of cancer recurrence or death by 58% and reduced the risk of distant metastasis or death by half.
"This is really a novel type of therapy in oncology," Green adds. "After you complete the vaccinations is where a lot of the activity is looked at."
Questions remain about whether the data offer a read-through for other mRNA-based cancer vaccines -- which, historically, hasn't been a given. Earlier this year, BioNTech and Roche halted a trial of autogene cevumeran as a treatment for bladder cancer, citing a shifting standard of care. In August, a mid-stage trial in colorectal cancer was also terminated.
Several other vaccines showed promising immune responses in early testing but failed to improve disease-free or overall survival in later trials. As individual mRNA platforms rely on distinct technologies, intismeran autogene's success in melanoma won't necessarily translate to other platforms.
Speaking at a conference last week, Moderna President Stephen Hoge characterized intismeran as "a long shot by any stretch of the imagination" in its early development days.
Still, he emphasized that the company continues to explore the vaccine's potential across other indications. "We have a lot of exploring to do, and we have to prioritize where we explore," Hoge said.
Intismeran may have stumbled on Wall Street, but the real test is only beginning.
Additional reporting by Bill Alpert
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