Key Takeaways
- Moderna shares fell another 8% this morning. On Saturday it and its partner Merck presented full Phase 3 data showing their personalized melanoma vaccine cut the risk of recurrence or death by 42%.
- The lead investigator called the results transformational for cancer, but the stock was priced for more than one melanoma win, and it still is.
- Moderna still trades far above its five-year average forward price/sales multiple, while analysts expect just $3.3 billion of revenue in 2028.
- Longer follow-up and overall-survival data are the next tests, with Merck reporting on Oct. 29 and Moderna on Nov. 6.
Moderna (MRNA) stock fell another 8% this morning. That’s despite Dr. Georgina Long calling the melanoma vaccine data she presented on Saturday “something so transformational for cancer.”
Long, of Melanoma Institute Australia, led the Phase 3 trial of intismeran, the personalized vaccine Moderna is developing with Merck (MRK). The stock had already lost about 19% on Thursday and Friday after an apparent leak of the results.
What exactly happened
At Saturday’s European Society for Medical Oncology meeting, Long presented results for patients who had already had surgery for melanoma. The trial tested intismeran plus Merck’s Keytruda against Keytruda alone:
- A 42% cut in the risk of recurrence or death
- A 38% cut in the risk of distant metastasis or death
- A stronger benefit after six months
- Overall-survival data still to come
That matters. Even with Keytruda, 44% of stage III patients see their cancer come back or die within five years. Three Phase 3 trials that added other immunotherapies to drugs like Keytruda all failed.
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The bar was higher for the stock
In Moderna’s Phase 2 trial, the cut in risk was 49% after five years of follow-up. The stock also ran up ahead of this readout, helped by the NIH’s plan for a COVID-style push on cancer vaccines. So 42% read as a step down.
At Friday’s close, Moderna traded at 42x forward sales. That’s down from 52x on Oct. 21 but still far above its five-year average of 7.7x.
At this morning’s price, it’s closer to 39x.
The case for patience
David Berman, Moderna’s chief development officer, argued on Saturday’s investor call that the benefit will grow. The vaccine takes weeks to make and weeks more to work, so the two arms of a trial track each other for about six months. In Phase 2, the cut in risk at the same point in follow-up was 44%. It grew to 49% as those early months counted for less.
“We do believe the phase III data, for this reason, will continue to improve,” he said.
Piper Sandler agrees: this morning it raised its price target to $230 from $167.
Still, analysts expect revenue of just $3.34 billion in 2028, about half of 2023’s $6.85 billion.
Nothing in Saturday’s data argues for cutting those estimates.
Great data, steep price
Moderna sank on “transformational” data because the stock was priced for more than one melanoma win. At close to 39x forward sales, it still is.
My take: intismeran looks like a real advance for patients, but I’d want the overall-survival data in hand before paying this multiple.
Of course, if the benefit grows the way Berman expects, today’s price could look cheap in hindsight. Merck reports on Oct. 29, and Moderna on Nov. 6.
So what is Moderna stock actually worth?
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Disclaimer:
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