The excitement around Moderna's cancer vaccine is cooling. Here's why.

By Jaimy Lee

Investors had 'incredibly high' expectations around the Phase 3 data for the drugmaker's experimental cancer treatment

Moderna's stock is down as investors digest the highly anticipated Phase 3 results for its experimental cancer vaccine.

Moderna's experimental cancer vaccine is getting a reality check, and that's not necessarily a bad thing.

The company's stock (MRNA) tumbled about 7.4% at the market open on Monday as investors digested a weekend of chatter about the Phase 3 data for intismeran, the therapeutic cancer vaccine Moderna is developing with Merck. Merck shares (MRK) were flat.

When patients with later-stage melanoma were given intismeran alongside Merck's cancer immunotherapy drug Keytruda, the combination helped reduce the risk of the cancer coming back or death by 42%.

But the manner in which the highly anticipated clinical-trial data came out cast a long shadow over the treatment's potential. The results for intismeran were unexpectedly published on Thursday due to a broken embargo, rather than being revealed during a presentation on Saturday at the European Society of Medical Oncology's conference in Madrid.

As a result, the event on Saturday likely underwhelmed investors, who were already grappling with two issues: The data for the vaccine weren't as good as they wanted them to be, and the experimental new treatment may produce similar outcomes as simply giving an immunotherapy like Keytruda before surgery.

"Investors [are considering] uncertainties around commercial implementation amidst a backdrop of an ESMO reception that felt muted and incredibly high ingoing expectations," Leerink Partners analyst Daina Graybosch wrote in a note on Saturday.

Intismeran is a brand-new mRNA technology that uses a patient's own cancer cells to create a custom treatment that is administered alongside Keytruda, which is commonly prescribed to people with melanoma after surgery. Investors have high hopes for the therapeutic vaccine, viewing it as a platform that can be used to treat patients with several different types of cancer.

The vaccine is expected to be approved next year, and analysts are closely monitoring studies evaluating intismeran in patients with renal-cell carcinoma and muscle-invasive bladder cancer who have undergone surgery. Data from those trials should arrive in the first half of next year.

"While melanoma provides important proof of concept, it doesn't yet answer the critical question of whether the approach will translate effectively to other cancers, which is the key determinant of whether the platform can justify current valuation levels and investor expectations," BMO Capital Markets analyst Evan David Seigerman told investors.

That's one outstanding question. The other stems from an ongoing debate about whether a likely expensive new and complicated treatment like intismeran is needed if neoadjuvant immunotherapy works just as well.

Neoadjuvant immunotherapy is when patients are treated with a drug like Keytruda or Yervoy or Opdivo - both of which are marketed by Bristol Myers Squibb (BMY) - before undergoing surgery to have their tumors removed. The results from several neoadjuvant studies showed that this kind of treatment can significantly extend how long certain patients live before a cancer recurrence or death.

But oncologists say not all patients with melanoma are the right fit for neoadjuvant immunotherapy, and analysts argue that it's unfair to compare the trials, which aren't designed the same way.

"With no head-to-head data, we expect the choice between approaches to be made physician by physician for now," Seigerman said.

Moderna's stock, which was near a five-year low this time last year, has surged since Aug. 19, when the companies first announced that the intismeran trial had been a success. Its shares are now up 548.4% so far this year, though they have declined 18.6% since Wednesday.

-Jaimy Lee

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10-26-26 0950ET