Modern shares fell as much as 25% on Thursday after partial data leaks about a closely watched cancer vaccine being developed with Merck.
Shares of both drugmakers fell even as the data, released in full on Thursday after the leak, appeared to benefit patients and was relatively positive with Wall Street expectations.
A special vaccine, known as autogene intismeran, paired with the Merck Keytruda immunotherapy reduced the risk of relapse or death in certain melanoma patients by 42% compared to Keytruda alone.
The data also showed that the shot together with Keytruda reduced the risk of cancer spreading to other parts of the body or death by 38%, compared to immunotherapy.
The company said that about 82% of patients who received the personalized cancer vaccine along with Keytruda were alive without the melanoma returning in the two years after taking it, compared to 70% who received Keytruda alone.
“This is a great development for our patients,” said Dr. Hussein Tawbi, a melanoma expert and trial investigator at the University of Texas MD Anderson Cancer Center, commented on the results.
He said an added benefit of the vaccine is that it has milder toxicity, or side effects like pain at the injection site, compared to other cancer treatments.
Detailed results of the phase 3 trial will be presented at the European Society for Medical Oncology conference this weekend.
“Whenever you put therapy on top of something that works really well, like Keytruda, sometimes it’s harder to show additional benefits. We have no problem showing additional benefits here,” Dr. Dean Li, Merck Research Laboratories president, said in an interview ahead of the results.
The benefit appeared to be greater after the six-month vaccine regimen, with a separate analysis showing a 58% reduction in the risk of relapse or death. The company says it’s too early to determine whether the treatment helps patients live longer.
Some analysts acknowledged higher investor expectations ahead of the release, but noted that the data was positive.
“We assert the relative reduction in relapse/death is clinically meaningful,” BMO Capital Markets analyst Evan Seigerman said in a research note on Thursday after the leak. “Like a [stock] The reaction may reflect higher expectations in the release of full data, rather than a true indictment of the effectiveness of the combo therapy.
Oncologists and investors see targeted vaccines as a possible breakthrough treatment, with the potential to 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 the company has more work to do to show the product can be effective across tumor types.
“I could dream of building a log cabin, but we got a piece of wood, and we only cut down one tree,” Li said. “Knocking down one tree doesn’t give you a cabin or a village.”
The shot is designed to target 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 unique cancer markers and then pair that response with Keytruda, which helps the body attack the cancer more effectively.
It may offer Moderna additional critical commercial products in the pipeline, after vaccines for Covid-19, flu and respiratory syncytial virus.
In a research note Thursday, UBS analysts said “this is a strong data set” and gives more confidence to upcoming vaccine studies in kidney and bladder cancer. He added the stock’s reaction may have been due more to expectations than disappointing data.
Against this backdrop of high expectations, Moderna shares have surged more than 530% year-to-date as of Thursday afternoon.
Shares of Merck, the bigger drugmaker, fell about 1% on Thursday. The company’s stock has risen nearly 41% this year.
Since the vaccine is personalized, the complex 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, which could get the shot to patients sooner.