Moderna shares surged nearly 177 percent on Wednesday after the biotech firm reported that its personalized mRNA cancer therapy, developed with Merck, dramatically cut the risk of melanoma recurrence in a late-stage clinical trial.
The stock closed at $174.38, up from $63.11 at the previous close, marking one of the biggest single-session gains for a large-cap biotech company in market history. The rally triggered heavy losses for short sellers, who lost an estimated $5 billion on the position, according to financial data tracked by market analysts.
Phase 3 Melanoma Results
The therapy, known as mRNA-4157/V940 and marketed as Intismeran in combination with Merck’s Keytruda immunotherapy, demonstrated a significant reduction in melanoma recurrence and spread in the randomized Phase 3 trial. Moderna described the results as a “landmark moment” for mRNA-based oncology, extending the technology platform well beyond its origins in COVID-19 vaccines.
Merck shares rose 12.6 percent to close at $152.20, making it the largest percentage gainer in the Dow Jones Industrial Average. The partnership between the two companies dates to 2022, when Merck exercised an option to jointly develop and commercialize the personalized cancer vaccine.
Broader Market Impact
The Moderna rally lifted the entire S&P 500 healthcare sector by 3.5 percent to a record high, providing the biggest single-sector contribution to the benchmark index. Novavax gained 10.8 percent while U.S.-listed shares of BioNTech jumped 22 percent as investors rotated into biotech stocks.
“Most tech companies are priced mainly on forward earnings expectations, and when interest rates creep up, those expectations are worth less and the stocks are worth less,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
The broader market also benefited from easing bond yields. The 30-year Treasury yield retreated from its highest level since 2007 after the U.S. Treasury announced it would double the size of buyback operations for longer-dated bonds. The Dow Jones rose 119.65 points to 53,463.05, while the S&P 500 gained 0.21 percent to close at 7,707.98.
The biotech rally stood in sharp contrast to chipmaker stocks, which fell as investors rotated out of high-valuation technology positions. Broadcom lost 4 percent while the broader semiconductor index shed 1.3 percent, highlighting the sector rotation underway as higher interest rates pressure growth-oriented equities.
Sources: Reuters; CBS News; Yahoo Finance; Spokesman-Review
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