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Moderna shares dropped 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 later Thursday following the leak, appeared meaningful for patients and positive relative to Wall Street expectations. The personalized vaccine, known as intismeran autogene, paired with Merck's immunotherapy Keytruda reduced the risk of recurrence or death in certain melanoma patients by 42% compared with Keytruda alone. The data also showed that the shot along with Keytruda reduced the risk of cancer spreading to distant parts of the body or death by 38%, compared with just the immunotherapy. The companies said about 82% of patients who received the personalized cancer vaccine alongside Keytruda were alive without their melanoma returning at two years after receiving the shot, compared with 70% of those who received Keytruda alone. "This is a huge development for our patients," said Dr. Hussein Tawbi, a melanoma expert and trial investigator at the University of Texas MD Anderson Cancer Center, about the results. He said that the added benefit of the vaccine also comes with much milder toxicity, or side effects like injection-site pain, compared to other cancer treatments. The detailed phase 3 trial results were set to be presented at the European Society for Medical Oncology conference this weekend. "Whenever you put a therapy on top of something that works really well, like Keytruda, sometimes it's harder to show additional benefit. We have no problems of showing additional benefit here," Dr. Dean Li, Merck Research Laboratories president, said in an interview ahead of the results. The benefit appeared even larger after the six-month vaccine regimen, with a separate analysis showing a 58% reduction in risk of recurrence or death. The companies say it is still too early to determine whether the treatment helps patients live longer overall. Several analysts acknowledged investors' elevated expectations ahead of the release, but noted that the data is overall positive. "We assert this relative reduction in recurrence/death is clinically meaningful," BMO Capital Markets analyst Evan Seigerman said in a research note on Thursday following the leak. "Such a [stock] reaction likely reflects inflated expectations into the full data release, rather than a true indictment on the efficacy of the combo therapy." Oncologists and investors see the targeted vaccine 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 across other tumors, such as non-small cell lung cancer, bladder cancer and renal cell carcinoma. But Li acknowledged the companies have more work to show the product can be effective across tumor types. "I can dream of creating a log cabin, but we got some wood chops, and we've just knocked down one tree," Li said. "Knocking one tree does not 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 those unique cancer markers and then pair that response with Keytruda, which helps the body attack the cancer more effectively. It could also offer Moderna a critical additional commercial product in its pipeline, following vaccines for Covid-19, the flu and respiratory syncytial virus. In a research note Thursday, UBS analysts said "this is overall a strong data set" and gives more confidence in upcoming studies of the vaccine in kidney and bladder cancers. They added the stock reaction may be due more to massive expectations than disappointing data. Against the backdrop of those high expectations, Moderna shares have spiked more than 530% year-to-date as of Thursday afternoon. Shares of Merck, a much larger drugmaker, fell by about 1% on Thursday. The company's stock has climbed nearly 41% this year. Since 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 shot to reach more patients more quickly.
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