Moderna's Cancer Vaccine Falls Short of Investor Hopes Despite Melanoma Gains

what happened

According to the Wall Street Journal, adding Moderna's cancer vaccine to immunotherapy reduced the risk of melanoma returning by 42% compared with immunotherapy alone. Scientists described the findings as a significant advance, but investors judged the effect insufficient, and the shares dropped 19% in the days after the data were released early.

Analysts note that doctors will have to decide which patients should receive what is expected to be a costly combination. New cancer drugs often launch at around $400,000 a year, and the vaccine requires more complex manufacturing than most medicines. Merck, a co-developer, also needs to replace revenue that will be lost when its blockbuster Keytruda goes off patent in about two years.

why it matters

For markets, the commercial potential matters as much as the science. Moderna must show that its mRNA technology can succeed beyond infectious diseases, where sales have been falling for years. Investor expectations for experimental drugs often outpace the scientific progress, and longer-term survival data are not expected for more than a year.

market impact

Moderna and Merck: disappointment over the results weighs on their shares as the market weighs commercial prospects.

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