Two years ago, Moderna was widely seen as a company in decline, its revenues shrinking as demand for Covid-19 vaccines faded. Today, it is one of the best-performing large biotech stocks in the market, and the reason is cancer.
Moderna shares reached a 52-week high on Friday, September 25, extending a remarkable rally built on the success of its individualised cancer vaccine. The stock traded at around $194.82, according to GuruFocus, as investors continued to pile into a story that has transformed the company's prospects in a matter of weeks.
The Motley Fool noted that Moderna extended the previous day's gains on growing optimism about the vaccine, even as a broader sell-off hit biotech stocks during the session.
The vaccine at the centre of the rally
The treatment driving the rally is intismeran autogene, an individualised neoantigen therapy that Moderna is developing with Merck. It is designed to be used together with Merck's immunotherapy Keytruda.
Unlike conventional vaccines, which are designed to prevent disease, intismeran is a therapeutic cancer vaccine created for each individual patient. Doctors sequence a patient's tumour to identify neoantigens, abnormal proteins found on cancer cells but not on healthy ones. Moderna then produces an mRNA vaccine encoding up to dozens of those neoantigens, training the patient's immune system to recognise and attack cancer cells carrying them.
The approach combines two of the most important advances in modern medicine: mRNA technology, which Moderna used to develop its Covid-19 vaccine at record speed, and immunotherapy, which has transformed the treatment of several cancers.
"When we give the neoantigen vaccine, we do see neoantigen-specific T cells, and we know those T cells can kill the tumor," David Berman, Moderna's chief development officer, said, according to 24/7 Wall St.
The trial results that changed everything
The turning point came on August 19, when Moderna and Merck announced that a late-stage trial of intismeran plus Keytruda in patients with melanoma who had undergone surgery had met its primary endpoint. The combination reduced the risk of the cancer returning compared with Keytruda alone.
Both companies' shares soared on the news, according to CNBC. Earlier Phase 2b data had shown that the combination reduced the risk of recurrence or death by 49 per cent compared with Keytruda alone, but the late-stage result was the confirmation investors had been waiting for.
Wall Street analysts described the result in striking terms, according to Yahoo Finance. Jefferies analyst Tycho Peterson said the update "represents an important proof point for mRNA modality beyond legacy COVID." Bank of America's Alec Stranahan called it "a watershed moment for Moderna". Citigroup's Geoff Meacham was more measured, noting that meeting the endpoint "with no new safety signals is encouraging" but that validating the broader platform would require the full dataset and evidence across other tumour types.
A rally measured in multiples
Since the trial readout, Moderna's shares have climbed steeply. According to 24/7 Wall St., the stock rose 6 per cent on September 17 alone and had gained about 137 per cent over the preceding month. Friday's 52-week high extends that run.
The scale of the move reflects how dramatically expectations for the company have shifted. Before the readout, much of Moderna's value was tied to a shrinking respiratory vaccine business. Now, investors are assigning significant value to the possibility that personalised cancer vaccines could become a major new category of medicine, with Moderna as a leader.
