Moderna shares fall despite promising data from cancer vaccine trial

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Moderna shares fell on Monday, as Wall Street pondered new trial results for the personalized cancer vaccine that it is developing in partnership with Merck.

Merck's stock was essentially flat.

Merck's Keytruda blockbuster and the experimental mRNA vaccination combined together reduced the risk of recurrence by 44%, compared to Keytruda alone. This was the first time the results of the phase two study were presented in detail.

The companies stated that nearly 80% of participants receiving both Keytruda and the vaccine remained cancer-free after 18 months, compared to 62% of participants only receiving Keytruda. The companies said that the side effects of the vaccine are generally mild. Fatigue is the most common.

These results, which were presented at a meeting of the American Association for Cancer Research in Florida, are in addition to the preliminary results released in December on the combination treatment.

In a press statement, Moderna's Dr. Kyle Holen said that the results indicate the combination of Keytruda and the vaccine "may be an innovative way to potentially extend the lives of high-risk patients with melanoma." Moderna and Merck announced that they would begin a phase-three trial in 2023 and "rapidly" expand their research on the treatment's effects on other tumor types, such as a lung cancer type.

Wall Street reacted to the news with a mixture of cautious optimism, and doubt.

SVB Securities analysts said that the results indicate the personalized cancer vaccine is promising. In a note published on Sunday, they wrote that the path to approval for the treatment is untested and new. They also said that the firm did not think that accelerated approval was an option.

The Food and Drug Administration has designated accelerated approval to expedite the clearance of drugs that treat serious medical conditions.

In a Monday note, Wolfe Research analyst Tim Anderson stated that many Moderna and Merck shareholders remain "cautiously hopeful at best" regarding the potential of the cancer vaccine/Keytruda combo.

He noted that expectations were high for the combination of treatments going into the weekend. However, he also pointed out that there are many cancer vaccine skeptics because of a "long-standing history of failures" in the field.

Mohit Bansal, a Wells Fargo Analyst, also expressed "cautious confidence" in the combination of treatments. Bansal noted in a note published on Sunday that "trial imbalances", which could have led to more favorable results, may have been the cause of the better performance for the cancer vaccine personalized.

He said that these imbalances require more information on the treatment.