Moderna shares fall regardless of promising most cancers vaccine knowledge

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shares of Modern fell on Monday as Wall Street munched over new trial results on the personalized cancer vaccine it is developing note.

Merck shares were essentially flat.

The experimental mRNA vaccine, when combined with Merck’s blockbuster drug Keytruda, reduces the risk of skin cancer-melanoma recurrence by 44% compared to Keytruda alone, the companies said on Sunday in their first detailed presentation of results from a key Phase 2 Study.

Almost 80% of participants who received both the vaccine and Keytruda remained cancer-free at 18 months, compared with 62% of participants who received only Keytruda, the companies said. They added that the vaccine’s side effects were generally mild, with fatigue being the most common.

These results, presented at a meeting of the American Association for Cancer Research in Florida, add to initial results on the treatment combination published in December.

The results suggest that the vaccine, when combined with Keytruda, “could be a novel means of potentially prolonging the lives of patients with high-risk melanoma,” said Dr. Kyle Holen, director of development, therapeutics and oncology at Moderna, in a press release. Moderna and Merck said they will initiate a Phase 3 trial in 2023 and will “rapidly expand” their research to look at the treatment’s effect on additional tumor types, including an important type of lung cancer.

Wall Street greeted the news with a mixture of cautious optimism and doubt.

Analysts from SVB Securities said the results suggest the personalized cancer vaccine shows promise. But they also wrote in a Sunday note that the treatment’s path to approval is new and untested, adding that the company doesn’t see accelerated approval as an option.

The Food and Drug Administration’s Accelerated Approval designation is intended to allow faster approval of medicines for serious conditions that address an unmet medical need.

A Monday note from Wolfe Research analyst Tim Anderson said many Moderna and Merck stakeholders remain “cautiously optimistic at best” about the possibilities of the cancer vaccine-Keytruda combination.

He said expectations for the treatment combination were quite high at the start of the weekend, but noted there are still many skeptics about cancer vaccines due to a “long history of failures in this area”.

Wells Fargo analyst Mohit Bansal also said he expressed “cautious optimism” about the treatment combination. In a Sunday note, Bansal pointed to “trial imbalances” that may have led to more favorable outcomes for the personalized cancer vaccine.

He said these imbalances warrant waiting for more data on the treatment.