Moderna stock broke out Tuesday after the company said adding its personalized cancer vaccine to Merck's Keytruda significantly cut the risk of relapse in melanoma patients.
The companies tested the regimen for a year in 157 patients with high-risk melanoma. Patients who took Moderna's drug plus Keytruda were 44% less likely to relapse or die than those who received Keytruda alone. Keytruda is the standard of care for this disease.
Now, Moderna Chief Executive Stephane Bancel says the companies plan to move the regimen into final-phase testing next year. They're also considering adding the personalized cancer vaccine to Keytruda in other cancers. In this case, the vaccine helps a patient's immune system generate T cells capable of taking on cancer if and when it returns.
Bancel says Moderna isn't a Covid company, though Moderna became a household name in 2020 when it gained Food and Drug Administration authorization for its Covid vaccine, in lockstep with Pfizer and Pfizer's partner BioNTech. Rather, Moderna is a platform company, he insists.
"People are starting to realize, 'Oh boy, those guys can do cancer too,' " he told Investor's Business Daily.
Moderna stock rocketed 19.6% to 197.54 on Tuesday. That helped shares break out of a cup-with-handle base, overtaking a buy point at 188.75, according to MarketSmith.com. Merck stock also climbed 1.8% to 110.91 on the stock market today. Shares of rivals Pfizer and BioNTech jumped 1.7% and 7%, respectively. Pfizer closed at 53.07 and BioNTech ended the regular session at 178.24.
Novavax, which is working on a different vaccine technology, also saw shares rise 5.1% to 17.21.
Moderna Stock: Shifting Gears
Some of Moderna's earliest efforts were in cancer, but the company quickly shifted gears when the virus that causes Covid erupted. The pandemic helped prove the platform. Now, Moderna has a growing web of projects in cancer, infectious diseases and rare illnesses.
Needham analyst Joseph Stringer says the results in melanoma will help Moderna broaden outside the early focus on respiratory illness like Covid, flu and respiratory syncytial virus. But he kept his hold rating on Moderna stock.
"We are more positive on Moderna following today's results because we think the initial data are supportive of an opportunity to build an expansive high-value oncology pipeline using Keytruda approved (uses) as a road map and diversify some pipeline risk away from the respiratory vaccines," he said in a note to clients.
The personalized cancer vaccine relies on the same messenger RNA technology as the Covid shot called Spikevax. The Covid vaccine primes the immune system to recognize the spike protein on the outside of the Covid-causing virus. This allows the body to make virus-blocking antibodies.
In the case of the cancer vaccine, the body is primed against the tumor's unique mutations. It arms the body with disease-fighting T cells if the cancer returns.
Each vaccine is personalized to the patient. First, doctors biopsy a patient's tumor. Then, they compare the cancerous tissue to healthy cells from the same patient to identify the specific mutations in the tumor cells. From that comparison, Moderna can then program a cancer vaccine bespoke to a patient's own specific tumor cells.
Moderna stock surged in October after Merck opted into the program.
"It's really made for just one patient at a time," Bancel said.
Manufacturing A Bespoke Cancer Vaccine
In the past, individualized cancer treatments have struggled to gain ground. Gilead Sciences and Novartis struggled for years with their cell therapies. Gilead has since seen a marked turnaround in sales, though Novartis is still not seeing the same success.
Bancel says the personalized cancer vaccine differs from the CAR-T treatments from Gilead and Novartis. Those drugs are developed using a patient's own blood. Moderna only needs the data from a patient's biopsy to make its drug.
"What we receive in the factory is just information," he said. "The speed is much faster and the scalability is stronger because we use the same enzymes for everybody. The only thing that stands between your cancer and my cancer, let's say, is the information that comes from the sequence of your tumor or my tumor. So, the manufacturing challenge is nothing in comparison to CAR-T."
Importantly, the personalized cancer vaccine isn't showing any significant safety concerns, the company says. This is key for Moderna stock as it moves into final-phase testing for a number of efforts based on its mRNA platform. It's also notable for Merck, which paid Moderna $250 million upfront for the ability to codevelop and co-commercialize the cancer vaccine.
In the midstage study, serious side effects occurred in 14.4% of patients who received the combination vs. just 10% of patients who received Keytruda alone.
'Copy And Paste'
The news comes as Moderna preps to unveil new data from other vaccines. The company also has a flu shot and a respiratory syncytial virus vaccine in Phase 3 testing.
Respiratory syncytial virus, or RSV, causes a respiratory illness that's particularly troublesome for newborns and older adults. There's no vaccine on the market today, though Pfizer and GSK are closing in on potential approvals in May. Moderna hopes to follow suit as well next year.
Also this week, the FDA said it would allow Vertex Pharmaceuticals and Moderna to begin testing their mRNA-based approach to cystic fibrosis. This would target the roughly 5,000 people who don't respond to traditional treatment.
So, the personalized cancer vaccine really dovetails well with recent news from Moderna, Bancel says. Today, there are three verticals (infectious diseases, cancer and rare diseases).
"Once you make a vertical work once, then it just becomes copy and paste, so you can scale very quickly," he said.
Moderna Stock Breaks Out
The move Tuesday morning helped Moderna reverse a recent downtrend. On Monday, Moderna shares ended down nearly 7% after Pfizer said it expects $10 billion to $15 billion from its mRNA-based vaccines by 2030. These vaccines would rival Moderna's own mRNA efforts.
SVB Securities analyst Mani Foroohar says investors were likely relieved Tuesday morning.
"We have fielded a steady stream of inbound (inquiries) from investors nervous about elevated expectations for (this) data, and expect shares to trade up on relief in response to (the) data," he said in a note.
But he reiterated his market perform rating on Moderna stock. Success in melanoma doesn't guarantee the personalized cancer vaccine will work in other cancers.
"We expect applicability of (personalized cancer vaccines) outside of this setting to drive controversy as investors debate the scale of platform value contemplated in shares and how directly one can translate data in melanoma to other indications," Foroohar said.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
