Moderna Sinks 4% After 18% Plunge as Melanoma Vaccine Selloff Extends; Merck and Pfizer Slip

Full late-stage results for the personalized melanoma vaccine from Moderna (NASDAQ:MRNA | MRNA Price Prediction) and Merck (NYSE:MRK) came back positive, yet the selling hasn’t stopped. Those numbers landed short of the loftiest hopes built into a long rally. Moderna stock is down 4% to $193.62 in morning trading. The move extends an 18% plunge from the prior session as the market reprices what the vaccine is worth to the company.

Biotech as a whole is holding steady, which keeps the damage concentrated in Moderna and its closest large-cap peers. The iShares Biotechnology ETF (NASDAQ:IBB) is unchanged at $209.54, so the slide in Moderna stock looks like a company-specific event. Large-cap stocks are slightly softer too, with the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) down 0.4% to $761.03, a much smaller dip than Moderna’s.

Meanwhile, Merck stock is at $146, down 0.8%. That’s a fraction of the decline in Moderna stock, even though the drugmaker co-developed the vaccine. Pfizer (NYSE:PFE) stock is at $30.22, down 0.7%, a move far closer to the dip in Merck stock than to the slide in Moderna stock.

Leaked Melanoma Data Resets Moderna’s Rally

Merck and Moderna released full late-stage data for intismeran autogene, their personalized melanoma vaccine given with Merck’s Keytruda. The release came after details leaked ahead of a medical-conference presentation scheduled for this weekend. Bloomberg reported on the possible leak as Moderna and Merck shares fell. Compared with Keytruda alone, the combination cut the risk of melanoma recurrence or death.

That result landed near what analysts expected. It fell short of the highest hopes, and it also showed a smaller benefit than an earlier, smaller trial produced in a different patient group. A long rally in Moderna stock began in August, when the company announced the trial had met its primary goal. Expectations built during that run left little room for a merely solid readout once the details came out. Positive data still triggered a steep correction.

Vaccine Carries Far More Weight for Moderna Than Merck

The personalized cancer vaccine sits at the center of Moderna’s growth story, which leaves Moderna stock exposed to any gap between the data and the hype. Every approved Moderna product is a respiratory vaccine, so oncology carries much of the long-term upside the market had been paying for during the rally. Such concentration explains why Moderna stock is taking heavier selling than Merck shares.

For Merck, the program is an add-on to Keytruda, its blockbuster cancer drug. Keytruda already supports Merck’s oncology business, which keeps the reaction in Merck stock muted while its partner sinks. Merck’s bull case rests on the combination widening Keytruda’s reach, while its bear case centers on cooler enthusiasm for the add-on after the full data.

Pfizer is a diversified drugmaker whose results rest on a broad product base spanning vaccines, oncology and primary care. That breadth protects Pfizer against any single trial readout. It also leaves the company with little direct stake in the melanoma vaccine’s success.

BioNTech (NASDAQ:BNTX) is also developing cancer immunotherapies. That puts it in the same research field as Moderna’s personalized vaccine.

Conference Presentation Is Moderna’s Next Test

A key question for Moderna is whether the full presentation at the medical conference this weekend changes how the market reads the data. Moderna stock goes into that event after a steep slide that has already stripped out much of the optimism built during the rally.

Merck’s role in that presentation could show whether the smaller selloff in Merck stock holds as doctors and analysts pick apart the full results. Shareholders should see if the iShares Biotechnology ETF holds steady. Investors weighing their exposure should adjust their holdings carefully given how concentrated the selling is in Moderna and Merck shares.

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