Moderna (MRNA)’s top two executives used a pair of investor conferences to deliver upbeat updates on the cancer vaccine that the mRNA giant is developing with Merck & Co.

Stephen Hoge, MD, Moderna president

Speaking at TD Cowen’s 43rd Annual Health Care Conference on Monday, Moderna president Stephen Hoge, MD, said the company was considering seeking accelerated approval for the mRNA-based personalized cancer vaccine (PCV) candidate, which Moderna calls mRNA-4157 and Merck calls V940.

That accelerated approval, Moderna reasons, may be able to be granted based on the strength of data it and Merck have generated from the Phase IIb KEYNOTE-942/mRNA-4157-P201 trial (NCT03897881), assessing the combination of mRNA-4157/V940 and Merck’s anti-PD1 cancer immunotherapy blockbuster Keytruda® (pembrolizumab) in 157 stage III/IV melanoma patients with high risk of recurrence following complete resection.

In December, the companies trumpeted results showing that the vaccine-Keytruda combo met the study’s primary endpoint of statistically significant and clinically meaningful improvement in recurrence-free survival (RFS) versus Keytruda alone.

“At some point, this randomized 150-person Phase IIb study that we ran might—might—be able to become the basis of an accelerated approval,” Hoge said. “We have to qualify it. It’s too early to say, but we are hopeful that the data will mature that way. It’s a randomized, standard controlled, with physically significant benefits. That’s a quite reasonable place to start.”

While Cowen’s conference was closed to retail investors and news outlets, Moderna enabled those investors, reporters, and anyone else interested to hear Hoge’s presentation by posting the audio on the “Events and Presentations” page of its website.

Hoge noted that adjuvant treatment with mRNA-4157/V940 in combination with Keytruda reduced the risk of recurrence or death by 44% compared with Keytruda monotherapy—a hazard ratio of 0.56 and a one-sided p value=0.0266.

“The question is, is that 0.56 all the way through? Or as generally has happened in immunotherapy, and this is true for checkpoint inhibitors like Keytruda, does that improve as you look at it piecewise? Does the relative benefit become more superior over time?” Hoge said. “That’s a stronger signal that you’ve really got the immune system controlling that disease.”

Something else researchers will be studying and sharing later, he added, is whether translational and biomarker data will ultimately show a selection of patients that respond even more strongly to the treatment leading to a higher benefit and improved hazard ratio.

Surge, then selloff

The data shared in December sparked a 26%, two-day buying surge in Moderna, whose stock price jumped from $165.13 to $208.95. It was an about-face for investors, who greeted news of Merck agreeing to partner with Moderna by sending shares just 8% higher. Merck paid Moderna $250 million upfront.

Since December, Moderna shares have since tumbled 34%, as investors have taken to heart that the days of rapidly rising profits and revenue generated by the company’s COVID-19 vaccine are well past. During the fourth quarter of 2022, declining revenue from the vaccine accounted for a 29% year-over-year drop in revenue, to $5.084 billion from $7.211 billion in Q4 2021, and Moderna has projected only $2 billion in product sales from the COVID-19 vaccine in the first half of 2023.

Since Moderna released Q4 and 2022 results on February 23, two analysts have lowered their 12-month price targets for Moderna shares:

  • Emmanuel Papadakis, MD, pan-Euro pharmaceuticals equity analyst with Deutsche Bank cut the firm’s target 11%, from $225 to $200 while maintaining a “Buy” rating.
  • Mani Foroohar, MD, senior managing director, genetic medicines and a senior research analyst with SVB Securities cut his firm’s target 16%, from $111 to $93, and downgraded the stock from “Market Perform” to “Underperform.” [SVB Securities is a wholly-owned subsidiary of SVB Financial Group, which was shut down Friday by the California Department of Financial Protection and Innovation; SVB Securities said Saturday that the shutdown “will not directly impact the broker-dealer’s business operations, which continue uninterrupted under the management of SVB Securities leadership team.”]

Foroohar cited escalating operating expenses and costs of goods and services; and the potential for paying out additional royalties following patent lawsuit challenges from Alnylam Pharmaceuticals (ALNY), Arbutus Biopharma (ABUS), and rival COVID-19 vaccine developers Pfizer (PFE) and BioNTech (BNTX)—which sued Moderna last summer.

Analyst warns of “underperformance”

“Collectively, these changes point to an extended period of underperformance as the operating leverage that made mRNA one of the greatest pandemic beneficiaries reverses,” Foroohar wrote last month in a research note.

BioNTech is among competing companies also working to develop cancer vaccines. Last year the company reported positive follow-up Phase I/II data for its wholly-owned novel chimeric antigen receptor T-cell therapy (CAR-T) candidate BNT211 in patients with relapsed or refractory advanced solid tumors—but saw no corresponding rise in its stock as a result.

Besides the Moderna-Merck tandem and BioNTech, other companies working on PCVs include Roche (ROG; SIX-Swiss Exchange) and its Genentech subsidiary, which is developing RO7198457; Nykode (OSE: NYKD), which expects to report updated interim Phase II data for its lead cancer vaccine candidate VB10.16 in the first half of 2023; Gritstone bio (GRTS), which is pursuing two PCV programs, Slate (consisting of Slate v1 and Slate-KRAS) and Granite; as well as privately-held Nouscom, whose NOUS-PEV is based on patient-specific neoantigens sourced from individual patient tumor mutanomes.

Gritstone expects to report preliminary data from its Granite Phase II/III trial (NCT05141721) assessing its individualized vaccine for first-line microsatellite-stable colorectal cancer in the fourth quarter.

mRNA-4157/V940 is designed to stimulate an immune response by generating T-cell responses based on the mutational signature of a patient’s tumor. Last month, the vaccine was granted the FDA’s Breakthrough Therapy designation

Positive and pivotal

Moderna’s cancer vaccine news was among the positives cited by RBC Capital Markets analyst Luca Issi when he initiated the firm’s coverage of the mRNA giant earlier this month. Issi gave Moderna a positive “Outperform” rating and set a 12-month price target of $200—more than 40% above where the stock has been trading this week.

“We are very impressed by recent top-line melanoma data,” Issi said in a research note. “With the randomized melanoma data in hand and enough evidence from earlier trials (across tumor types, line of therapy, and both mono and combo), we are believers and think that personalized cancer vaccine could be here.”

“Overall, we have melanoma at 60% PoS and other tumor types at 30% and that is the primary driver of the upside potential,” Issi added.

Stéphane Bancel, Moderna CEO

The same day Hoge addressed the TD Cowen conference, Moderna CEO Stéphane Bancel told another Boston investor conference that the clinical development of the cancer vaccine will advance into pivotal trials in adjuvant melanoma as well as non-small cell lung cancer.

“We’re going to invest very heavily with our partner Merck to get a Phase III for melanoma started this year, to get a Phase III in the lung started this year,” Bancel said addressing The Wall Street Journal’s WSJ Health Forum. “We want to do a couple of more Phase III (trials) right away.”

Bancel summed up the clinical development approach of his company and also addressed the cancer vaccine: First, pursue indications where Keytruda has been shown to be successful. Then pursue indications where Keytruda didn’t.

“Maybe there’s a scientific rationale where you combine Keytruda and the Moderna vaccine to push and get over the hump of the immune system, to get clinical impact. We’re going to want to try that as well, but it’s not priority number one,” Bancel said.

Taking a much longer view, Bancel added, Moderna and Merck will combine the vaccine with advances in diagnostics to stop cancer earlier: “We all know the key with cancer is to get it as early as we can. It will save lives. It will reduce healthcare costs as well as to the healthcare system. And that’s something that we want to do.”

Leaders and laggards

  • Aclaris Therapeutics (ACRS) shares nosedived 45% on March 6 after the company acknowledged that its lead pipeline candidate zunsemetinib (ATI-450) failed the Phase IIa ATI-450-HS-201 trial (NCT05216224) assessing the oral MK2 inhibitor in patients with moderate to severe hidradenitis suppurativa. Preliminary topline results showed that zunsemetinib missed its primary endpoint of change from baseline in inflammatory nodule/abscess count (AN) of zunsemetinib 50 mg BID versus placebo at week 12. The study also missed secondary efficacy endpoints that included percentage of patients achieving HiSCR-50. Aclaris is still studying zunsemetinib in a Phase IIb trial (NCT05279417) in patients with moderate to severe rheumatoid arthritis.
  • BridgeBio Pharma (BBIO) shares rocketed 71% early this week after the company announced positive results Monday in patients dosed at the highest dosage (Cohort 5, 0.25 mg/kg once daily) in its Phase II PROPEL2 trial (NCT04265651) evaluating infigratinib in children with achondroplasia. The oral small molecule FGFR3 inhibitor showed a mean increase from baseline in annualized height velocity (AHV) of +3.03 cm/year for the 10 children with at least six months of follow-up. Shares zoomed 52% March 6, from $10.87 to $16.52, and climbed another 12% last Tuesday, to $18.55. BridgeBio capitalized on the clinical success Monday with a public offering of $150 million of common stock.
  • Neoleukin Therapeutics (NLTX) shares soared 36% on Thursday, from $0.53 to $0.72, after the next-generation developer of immunotherapies for cancer, inflammation, and autoimmunity based on using de novo proteins announced a restructuring that will eliminate approximately 70% of its workforce—approximately 32 of a reported 46 jobs, four months after shedding 40% of its employees. Neoleukin also announced the departure of CEO Jonathan Drachman, MD, and its retention of SVB Securities to help it evaluate strategic alternatives, with the goal of maximizing shareholder value.
  • Protagonist Therapeutics (PTGX) shares jumped 52% last Tuesday, from $15.20 to $23.09 after the company announced positive topline results for the Phase IIb FRONTIER 1 trial (NCT05223868) assessing JNJ-2113 (PN-235) in patients with moderate-to-severe plaque psoriasis, through a collaboration with Johnson & Johnson’s Janssen Biotech. The oral IL-23 receptor antagonist achieved the study’s primary efficacy endpoint by showing that a statistically significant greater proportion of patients receiving JNJ-2113 achieved PASI-75, a 75% improvement in skin lesions as measured by the Psoriasis Area and Severity Index, compared to placebo at Week 16 in all five treatment groups.
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