Moderna is about to release the trial results for its cancer vaccine. A lot is riding on this data.

By Jaimy Lee

Moderna is one of the hottest stocks of the year because of its custom cancer treatment. Full Phase 3 data are set to be revealed this weekend.

Moderna and Merck are expected to soon share the full Phase 3 data for their experimental therapeutic vaccine.

Moderna's audacious bet that it can transform cancer treatment with customized mRNA technology is getting closer to reality.

The biotech company, already a household name for its mRNA COVID-19 vaccine, is now betting that the same mRNA technology can revolutionize the way melanoma and potentially other cancers are treated.

On Saturday, researchers are set to present the full Phase 3 data for Moderna and Merck's experimental therapeutic cancer vaccine at a high-profile medical conference in Madrid. The companies have already said that the study met primary and secondary endpoints, but they haven't shared details of how long patients stayed cancer-free.

'It's a first-in-class approach that is hopefully going to change the world.'Janice Mehnert, Perlmutter Cancer Center, NYU Langone Health

It's the most anticipated clinical-trial readout this week, notably because the conference organizers - the European Society of Medical Oncology -scheduled the presentation for the Presidential Symposium, which is reserved for medical studies that change the standard of care.

"It's a first-in-class approach that is hopefully going to change the world," said Janice Mehnert, director of melanoma and cutaneous medical oncology at NYU Langone Health's Perlmutter Cancer Center and one of the researchers who worked on the trial.

That kind of talk is thrilling to investors. Moderna's stock (MRNA) has soared 284% since the companies announced in August that the trial was a success, and it's one of the top performers in the S&P 500 SPX this year. But Wall Street analysts and oncologists, including NYU's Mehnert, still want to see all the data to understand how much better the combination of the therapeutic vaccine and Keytruda is than Keytruda alone.

"I hope we get to see what the magnitude of benefit is," said Daniel Olson, an oncologist in the UChicago Medicine hospital system, one of the clinical trial's sites. "That will really tell us: Is this something that we want to move forward and bring into the clinic?"

The vaccine, called intismeran, is a radical new approach to treating melanoma that uses genetic data from the patient's tumor to create a customized vaccine. Patients undergo surgery to have their tumor removed. Scientists sequence the tumor to identify mutated proteins, which are also called neoantigens, and then create an mRNA strand using up to 34 of the neoantigens that they believe will produce the best immune response. The whole process takes about six weeks.

"It is truly a one-therapy-per-patient approach," Mehnert said. "That vaccine, once it's made - it can only be used for you."

'We believe the outcomes will support the excitement, and we see low probability of data that resolve the main debates.'Daina Graybosch, Leerink Partners

The vaccine is administered alongside Merck's Keytruda, one of several immunotherapies that have helped extend the lives of Americans with cancer in the decade or so that they've been on the market. Keytruda was the world's top-selling drug for years and is still on track to bring in about $32 billion in sales this year.

The companies shared information on the trial's success on Aug. 19, reigniting interest in Moderna's mRNA technology. Its stock closed 177% higher that day, at $174.38. The stock is still trading far lower than its record high of $484.47 in 2021, but it's trading at about 11 times its five-year low of $22.36, registered on Nov. 20. Merck's stock (MRK), which has also benefited from investors fleeing to the safety of healthcare stocks, closed at its then-all-time high of $152.20 on Aug. 21.

"We believe the outcomes will support the excitement," said Leerink Partners analyst Daina Graybosch in a note to investors last week, "and we see low probability of data that resolve the main debates (potential beyond melanoma and profitability)."

The following are two key questions that oncologists and analysts have about the Phase 3 data.

What is the hazard ratio?

The key question heading into this weekend is about the hazard ratio for recurrence-free survival, which is the time from treatment to the cancer's coming back or the patient's dying.

In the Phase 2b study, the most up-to-date hazard ratio for recurrence-free survival was 0.51 after three years. William Blair's Matt Phipps considers a hazard ratio of no more than 0.70 as positive for investors, while Leerink's Graybosch said that a hazard ratio for recurrence-free survival and/or distant-metastasis-free survival below 0.60 will be an exciting and standard-of-care-changing outcome.

A hazard ratio of 0.65 for recurrence-free survival translates to a roughly 35% reduction in cancer coming back, according to UBS Securities analyst Michael Yee, who thinks Moderna's stock could rally between 10% and 20% on that ratio.

Hazard ratios are often more impressive in midstage trials, which enroll fewer patients than late-stage studies do. Moderna and Merck's Phase 2b trial enrolled 157 patients. The Phase 3 trial comprised 1,137 patients.

"When you move that forward to a Phase 3 study with a much bigger group of patients, some of those signals that you see in Phase 2 can sometimes get watered down," Olson noted.

Either way, the importance of the hazard ratio goes beyond showing how well the vaccine works in this subset of melanoma patients. The more favorable the hazard ratio, the greater the likelihood that the treatment works in other immunogenic cancers, according to Olson. That's important to oncologists on the front lines of treating patients and to investors, who want to see Moderna return to profitability.

"If the hazard ratio is really favorable, and we see this massive benefit," Olson said, "that would suggest that this could be successful, just like we saw with the original immunotherapy studies."

Will this vaccine work in other cancers?

One of Wall Street's biggest questions is whether this vaccine can be used to treat cancers beyond melanoma, which is an immunogenic cancer. Immunotherapies like Keytruda or Bristol Myers Squibb's (BMY) Opdivo work well against these types of tumors. That's why both drugs were first tested and then approved for melanoma before other cancers.

Keytruda is approved to treat more than a dozen cancers, and the companies are already testing the cancer vaccine in at least eight other trials for different cancers at different stages. That includes renal-cell carcinoma, bladder cancer and non-small-cell lung cancer.

'Everywhere checkpoints work, intismeran should be able to work.'David Berman, Moderna

Moderna believes that the vaccine can be used for any patient who can be treated with Keytruda and other immunotherapies, which are known as PD-1s or checkpoint inhibitors.

"Everywhere checkpoints work, intismeran should be able to work," David Berman, Moderna's chief development officer, said last month at an investor conference, according to an AlphaSense transcript.

But immunotherapies don't do as well against cancers with a lower mutational burden like pancreatic cancer, and they aren't prescribed for people with cancer in the earliest stages of the disease. Moderna's team believes its vaccine has potential for those patients, as well.

-Jaimy Lee

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