Personalization is all the rage these days. Whether we're talking about the business of entertainment, food, or clothing, consumers have more options today than anyone imagined possible a couple of decades ago.
Moderna (MRNA +4.45%) and its big pharma collaboration partner, Merck (MRK +0.33%), recently posted compelling clinical-trial results that suggest cancer treatments are about to become a lot more personalized too. On Monday, June 5, the partners showed off compelling results for a personalized cancer vaccine that Moderna calls mRNA-4157 and Merck calls V940.
NASDAQ: MRNA
Key Data Points
There are a whole lot of ins and outs when it comes to interpreting cancer-trial data. Let's look at the most important details to see if Moderna's a smart stock to buy now.
A big improvement
Keytruda is a popular immunotherapy from Merck that takes the brakes off the immune system so it can fight tumors. It's highly effective for some patients, but it doesn't seem to accomplish anything for most who receive it. Merck and companies with similar drugs have been hard at work for years trying to make Keytruda and other drugs like it effective for more people.
NYSE: MRK
Key Data Points
Moderna's experimental new cancer treatment starts with a genetic profile of an individual patient's resected tumors. That profile is used to produce a single strand of genetic material that codes for dozens of mutations specific to their disease. The end result is an immune system primed to target new cancer cells before they can gain a foothold.
Recent results from a trial testing mRNA-4157 suggest Moderna really can unlock Keytruda's potential for more patients in the adjuvant setting. Back in April, Merck and Moderna told us that treatment with mRNA-4157 reduced skin cancer patients' overall risk of disease recurrence or death by 44% compared to Keytruda alone. In June, the partners showed us that adding mRNA-4157 to Keytruda reduced the risk of distant metastasis or death by 65% compared to treatment with Keytruda alone for these post-surgery melanoma patients.
Next steps
The attention-getting results Moderna and Merck presented came from a phase 2 trial with melanoma patients. Repeating the results in a larger phase 3 trial could eventually make mRNA-4157 a new treatment option to keep multiple types of solid tumors from coming back after surgery.
Merck and Moderna expect to begin a much larger phase 3 trial designed to support a new drug application for mRNA-4157 as a melanoma treatment later this year. Moderna also expects rapid expansion of its phase 3 program to include the lucrative lung cancer indication and additional tumor types.
Based on phase 2 results, there's a good chance a repeat performance in phase 3 will make mRNA-4157 a new adjuvant treatment for melanoma patients. That said, investors shouldn't hold their breath waiting for blockbuster sales that can help Moderna's plummeting sales and profits begin moving in the right direction again.
MRNA Revenue (Quarterly) data by YCharts.
It can take years to prove a cancer drug reduces patients' risk of disease recurrence. The phase 2 study that has been producing encouraging data this year got started way back in July 2019.
Cancer vaccines aren't a new idea. In fact, Imlygic from Amgen is a cancer vaccine that earned approval back in 2015 to treat melanoma patients who have tumors that return after their initial surgery. Despite plenty of time on the market, Imlygic sales are so insignificant that the company still doesn't mention them in quarterly-earnings reports.
Moderna's cancer vaccine and Imlygic both get cells to produce proteins that stimulate the immune system, but the similarities end there. While Imlygic produces the same protein for everyone, mRNA-4157 presents immune systems with dozens of targets specific to each patient's disease.
Moreover, Moderna is armed with compelling clinical-trial results that show mRNA-4157 reduces the risk of recurrence when administered immediately after surgery. Patients in these earlier stages tend to stay on treatment long enough that mRNA-4157 could see a lot more demand than Amgen ever dreamed of for Imlygic.
So far, mRNA-4157's personalization appears much more effective than Imlygic's one-size-fits-all approach. That said, mRNA-4157's manufacturing process will get extremely complicated because Moderna needs to design new batches for each patient.
A buy now?
Moderna shares are trading at around 8.5 times forward-looking earnings expectations. At this low multiple, long-term investors could realize market-beating gains even if profits hold steady and never rise again. Without any growth drivers to replace sagging COVID-19 vaccine sales, though, holding steady might be too much to ask.
Moderna expects to submit an application to the U.S. Food and Drug Administration (FDA) for its respiratory syncytial virus (RSV) vaccine later this year. Even if all goes well, approval isn't likely to occur until the middle of 2024. By then, RSV vaccines from GlaxoSmithKline and Pfizer that earned approval earlier this year will likely be well entrenched.
Moderna's cancer-vaccine results are compelling from a medical point of view, but they don't make it a good stock to buy now. It's probably best to watch this company's story play out from a safe distance.
