What happened
Shares of mRNA pioneer Moderna (MRNA -0.47%) were falling today, down 8.4% as of 3:52 p.m. ET.
On Sunday, Moderna and trial partner Merck released data from a midstage combination trial, involving both Moderna's mRNA cancer shot mRNA-4157 (V940) and Merck's Keytruda, specifically for stage 3 and 4 melanoma, or skin cancer.
While the trial did show a statistically significant improvement in patient outcomes, apparently it wasn't enough to satisfy Wall Street's expectations.
So what
In the trial results released on Sunday, only 22.4% of patients dosed with the combination Moderna-Keytruda drug had a recurrence of the disease or death, as opposed to 40% recurrence or death in the Keytruda-only arm. Twelve-month recurrence-free survival (RFS) rates were 83.4% and 77.1% in the combination and Keytruda-only arms, respectively, and 18-month RFS rates were 78.6% and 62.2%, respectively.
So while results were positive, they may have been a letdown for some investors hoping for better results and a quicker path to commercialization. Of note, Moderna's revenue and profits are still largely tied to its COVID-19 vaccine, and those sales are waning this year in a big way.
Analysts at J.P. Morgan noted the results weren't "wildly better than expectations." Meanwhile, SVB Securities analyst Mani Foroohar said, "We see a strong and exciting proof-of-concept signal for personalized vaccination, but a longish and complex path to bringing this therapy to melanoma patients and beyond."
Image source: Getty Images.
Now what
Moderna has about $9.9 billion in cash on its balance sheet, but now that COVID cases are waning, its blockbuster 2021 and 2022 results are projected to flip from profits to losses this year and next. Analysts currently see Moderna losing $2.15 per share this year and $3.52 next year on average, as opposed to the healthy $20.12 in profit per share the company made in 2022.
While Moderna does have a robust pipeline for other mRNA vaccines in a range of diseases, from cancer to the flu to RSV and more, those trials will take some time to finish, with more uncertain outcomes. As Moderna's profits flip to losses, that could leave investors impatient for Moderna's next big thing, especially in this higher-rate environment.
Still, the sales "booms" of blockbuster drugs that eventually go away due to patent cliffs shouldn't be a foreign concept to biotech investors. If you're still bullish on the prospects for mRNA technology to apply to a bunch of different diseases in the future, Moderna is still a pioneer and leader in the space, and last weekend's trial results do back that up.
