Moderna Stock slips on mixed earnings after winning FDA Boon for its cancer vaccine

Modern (MRNA) stock returned lower Thursday after the Food and Drug Administration granted it Merck (MRK)-partnered cancer vaccine a groundbreaking designation.


The companies are testing the personalized cancer vaccine in combination with Merck’s Keytruda in patients with melanoma after surgery. But Moderna stock took an early blow after missing Q4 earnings guidance and releasing light sales guidance for 2023.

With the FDA’s designation, the agency recognizes that the combination may provide a substantial improvement over currently available therapies. The designation also allows the agency to speed up the review process.

Still, in today’s premarket trading on the stock market, Moderna shares fell 4.4% near 151.20, a reversal from an after-hours gain on Wednesday. Merck shares lost a fraction and traded around 109.10.

Moderna Stock: ‘A new frontier’

The personalized cancer vaccine uses the same messenger RNA platform as Moderna’s blockbuster Covid vaccine.

In this case, it prompts the immune system to make T cells capable of attacking a patient’s tumor cells. Patients who received tailored vaccines on top of Keytruda were 44% less likely to relapse or die than those who received Keytruda alone. Keytruda is the standard treatment for these patients.

Shares of Moderna rose nearly 20% on the day it announced those results.

Keytruda works by exposing tumor cells that are hiding from the immune system. The cancer vaccine adds another layer – it gives the immune system the keys to the tumor’s unique DNA signature. So if the cancer returns, the T cells are ready to go.

Moderna president Stephen Hoge said in a written statement that the cancer vaccine “represents a new frontier in the treatment of melanoma and other cancers.” But Moderna shares have been falling since mid-January.

Cancer vaccine key to growth?

As of Wednesday’s close, Moderna stock was sitting at a floor on its 200-day moving average, shows.

The company will report its fourth-quarter results Thursday before the opening bell. Wall Street expects sharp declines in sales and adjusted earnings. That trend is expected to continue over the next two quarters. Analysts expect growth to resume in the third quarter.

But long-term growth will depend on newer products such as the cancer vaccine and a possible shot targeting respiratory syncytial virus in older adults. Moderna stock investors are eyeing the next steps for the RSV vaccine, which also has a groundbreaking title.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


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