Moderna (MRNA) shares jumped nearly 60% in premarket trading after Merck and Moderna announced Wednesday that their personalized mRNA cancer vaccine combined with Merck’s immunotherapy Keytruda met key goals in a late-stage trial of more than 1,100 high-risk or advanced melanoma patients who had undergone surgery.
The phase 3 trial met its primary endpoint of significantly extending the time patients lived without melanoma recurrence compared with Keytruda alone. The combination regimen also reduced the risk of cancer spreading to distant organs. The results build on positive phase 2 data from earlier this year. The study will continue to assess overall survival and other outcomes. The companies plan to present the data at an international medical meeting but have not specified when they will submit applications for approval in the United States.
Jane Healy, Merck’s head of oncology early development, said melanoma patients face stress after diagnosis, undergo treatments such as surgery, and then worry about recurrence. The therapy delivered a clinically meaningful improvement over Keytruda, the standard of care, and was well tolerated, with side effects similar to commonly used vaccines.
The personalized vaccine is designed to target specific mutations in each patient’s tumor rather than using a one-size-fits-all approach. The goal is to train the immune system to recognize and attack unique cancer markers, with Keytruda enhancing that response. Healy said the results are meaningful for melanoma patients and point to the potential of this new class of therapy in future trials for other cancers.
The clinical advance, however, has not yet reversed Moderna’s weak long-term financial performance. Revenue declined at a 20.5% annual rate over the past five years. Earnings per share fell at a 24.5% annual rate, a steeper drop than revenue, reflecting difficulty in adjusting fixed costs to shrinking demand. Free cash flow margin declined 95.9 percentage points over five years and was negative 55.8% over the trailing 12 months.
Leerink Partners analyst Mani Foroohar said before the results that the phase 3 data was a make-or-break event for Moderna’s stock. Analysts believe the current valuation already reflects expectations that the personalized cancer vaccine could eventually work across multiple cancer types, not just melanoma. Merck and Moderna are studying the vaccine in non-small cell lung cancer, bladder cancer and renal cell carcinoma.
The initial share reaction is positive, but falling revenue, shrinking earnings and negative free cash flow remain fundamental pressures for the company.
