Modern shares fell as much as 25% on Thursday following the leak of partial data on its closely watched cancer vaccine, developed with Merck.
Shares of both drugmakers fell even though the data, released in full Thursday after the leak, appeared meaningful to patients and positive compared to Wall Street expectations.
The personalized vaccine, known as autogenous intismeran, combined with Merck’s Keytruda immunotherapy, reduced the risk of recurrence or death in some melanoma patients by 42%, compared to Keytruda alone.
The data also showed that the injection combined with Keytruda reduced the risk of cancer spreading to distant parts of the body or death by 38%, compared to immunotherapy alone.
The companies said about 82% of patients who received the personalized cancer vaccine with Keytruda were alive without their melanoma returning two years after receiving the vaccine, compared to 70% of those who received Keytruda alone.
“This is a huge development for our patients,” Dr. Hussein Tawbi, a melanoma expert and researcher at the University of Texas MD Anderson Cancer Center, said of the findings.
He said the added benefit of the vaccine also comes with much milder toxicity or side effects like pain at the injection site, compared to other cancer treatments.
Detailed results from the phase 3 trial are expected to be presented this weekend at the European Society for Medical Oncology conference.
“Any time you add a therapy to something that works really well, like Keytruda, sometimes it’s harder to demonstrate additional benefit. We have no problem demonstrating additional benefit here,” Dr. Dean Li, president of Merck Research Laboratories, said in an interview before the results.
The benefit appeared even greater after the six-month vaccination schedule, with a separate analysis showing a 58% reduction in the risk of recurrence or death. The companies say it’s still too early to determine whether the treatment overall helps patients live longer.
Several analysts acknowledged high investor expectations ahead of the release, but noted that the data is positive overall.
“We assert that this relative reduction in recurrence/death is clinically meaningful,” BMO Capital Markets analyst Evan Seigerman said in a research note following the leak on Thursday. “Such a (stock) reaction likely reflects inflated expectations in the full publication of the data, rather than a true indictment on the effectiveness of the combination therapy.”
Oncologists and investors view the targeted vaccine as a possible breakthrough treatment that could be used to treat other forms of cancer in the future. Merck and Moderna are studying the vaccine in several trials in other tumors, such as non-small cell lung cancer, bladder cancer and renal cell carcinoma.
But Li acknowledged that companies still have work to do to demonstrate that the product can be effective on all tumor types.
“I can dream of making a log cabin, but we have a few pieces of wood and we just cut down a tree,” Li said. “Hitting a tree doesn’t give you a cabin or a village.”
The shot is designed to target the specific mutations in each patient’s tumor rather than using a one-size-fits-all approach. The idea is to train the immune system to recognize and kill these unique cancer markers, then combine that response with Keytruda, which helps the body attack cancer more effectively.
It could also offer Moderna an additional critical commercial product in its pipeline, after vaccines against Covid-19, influenza and respiratory syncytial virus.
In a research note released Thursday, UBS analysts said “this is overall a strong data set” that provides further confidence in upcoming studies of the vaccine against kidney and bladder cancers. They added that the stock reaction could be due more to massive expectations than disappointing data.
Against the backdrop of these high expectations, Moderna shares have soared more than 530% year-to-date as of Thursday afternoon.
Shares of Merck, a much larger pharmaceutical maker, fell about 1% on Thursday. The company’s shares have soared nearly 41% this year.
Because the vaccine is personalized, the complicated manufacturing process can take six weeks. But Merck CEO Robert Davis told CNBC last week that the company believes it can shorten that timeline in the future, potentially allowing the vaccine to reach more patients more quickly.
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