Shares of Moderna plunged 25% on Thursday following a potential leak of Phase 3 clinical trial data for its experimental cancer vaccine, setting off a sharp selloff that comes after Citigroup downgraded Moderna and said its initial positive vaccine results gave it an “unjustifiable” valuation.
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Key Takeaways
- Shares of Moderna were down 26% to $181.14 at around 2 p.m. EDT on Thursday and shares of Merck, with which Moderna developed the vaccine, were down about 2%.
- The downturn for Moderna came after early results from a Phase 3 study for its therapeutic cancer vaccine were reportedly briefly published on the medical news site Oncology Central before being quickly removed.
- The results, originally scheduled for presentation on Saturday, were positive but the market faltered as investors weighed if they justified the stock’s sky-high pre-leak valuation.
- The wipeout erased nearly $20 billion in market value for Moderna.
Key Background
Moderna has been on a remarkable—and likely unsustainable—trajectory since it first announced positive Phase 3 trial results in August. The company said its personalized cancer vaccine for high-risk melanoma (called intismeran) significantly lowered the odds of cancer returning or spreading to distant organs, like the lungs, liver or brain. Shares of Moderna immediately skyrocketed and were up 290% from Aug. 18, the day before the announcement, to Wednesday. Citigroup analyst Geoff Meacham last month downgraded Moderna from a neutral position and said the boosted price was “unjustifiable.” To make the pre-drop share price make sense, Moderna would need to generate about $13 billion in annual oncology revenue but Citi’s financial model estimated it would make a fraction of that figure. Citi said the high share price was almost seven times higher than what realistic commercial cash flows suggest.
What to know
Intismeran autogene is a therapeutic cancer vaccine to be given after a tumor is surgically removed to train the immune system to hunt down and eliminate any lingering micro-tumors that surgeons may not have been able to target. The shot is fully customized for every patient and Moderna is able to use supercomputer data to synthesize a custom-tailored mRNA sequence that is injected into the patient. The Phase 3 trial at the center of Thursday’s crash was reported to be promising but the actual nitty gritty results were expected to be presented publicly for the first time at a cancer conference in Madrid on Saturday.
Tangent
Major billionaires shareholders in Moderna took big hits to their net worths as the stock plummeted Thursday. Moderna CEO Stéphane Bancel was down $1.8 billion, or 23.5% of his net worth, on Thursday afternoon with a new valuation of $6 billion, according to the Forbes real-time billionaires list. Timothy Springer, a founding investor, lost 21.5% of his valuation, more than $704.8 million, putting him at $2.6 billion. Co-founder Co-founder Robert Langer lost $696.8 million (24.6% of his wealth) and co-founder Noubar Afeyan, worth $2.2 billion, lost $141.7 million (6%). Company president Stephen Hoge, who has a net worth of $1.1 billion, lost $319.1 million (22.8%).
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