Moderna stock surged Monday — nearing its first breakout in over a year — after launching a third study of its Merck-partnered cancer vaccine.
The companies will test a combination of the cancer vaccine and Merck's blockbuster cancer drug, Keytruda, in patients with cutaneous squamous cell carcinoma. Diagnosis rates are climbing for this non-melanoma form of skin cancer. There are about 1 million new cases diagnosed in the U.S. every year, RBC Capital Markets analyst Luca Issi said in a report.
The experimental cancer vaccine has already shown promise in patients with melanoma and non-small cell lung cancer. The latter is a very common form of lung cancer.
"Getting approved on the Phase 2 (study) remains aspirational, but we like that Phase 3 is now up and running and Merck has the confidence to now start three potentially pivotal trials that will enroll close to about 3,000 patients," Issi said.
On the stock market today, Moderna stock popped 8.7% to 111.98. Shares are forming a cup base with a buy point at 115.97, according to MarketSurge.com. Merck stock, on the other hand, sank 0.6% to 122.77.
Moderna Stock: Personalized Cancer Vaccine
The cancer vaccine is bespoke for each patient. It teaches the immune system to find the genetic mutations specific to a patient's tumors. Then, the immune system can launch its attack.
In December, Moderna and Merck said a combination of the cancer vaccine and Keytruda reduced the risk of relapse or death by 49% in melanoma patients over three years. They compared the results with Keytruda alone. Moderna stock jumped 9.3% on Dec. 14, the day the companies unveiled the test results.
Now, the companies are moving into another form of skin cancer. Notably, Keytruda and other similar drugs are not yet approved for patients with cutaneous squamous cell carcinoma. Further, the study will include patients who've had their skin cancer treated, and those who haven't.
RBC's Issi says he's a "believer in the cancer vaccine approach." The benefit has been seen across all key subgroups of patients, and the approach potentially prevents a worse prognosis over time as well as local recurrence. Side effects — including fever, chills and flu-like symptoms — also suggest the immune system has been engaged.
Issi kept his outperform rating and 125 price target on Moderna stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, @IBD_AGatlin.
