Summary of Key Points
After a sharp decline in revenue from COVID-19 vaccines, Moderna's phase three trials for its personalized mRNA cancer vaccine in collaboration with Merck have been successful (the first of its kind to meet phase three criteria globally), causing the company's stock price to soar by over 100%. However, for this vaccine to become a profitable business, it still needs to overcome four major challenges: production, cost, pricing, and regulation. This marks the official transition of mRNA technology from a "COVID-19 emergency tool" to a "tumor treatment platform," providing a lifeline for Moderna and giving a boost to the global mRNA industry as a whole.
Why Can This Cancer Vaccine Cure Diseases?
The general public's perception of vaccines is that they prevent viruses, but this vaccine is designed to treat already existing cancers. The logic is simple:
1. Cancer cells have unique "fingerprints": Each tumor has distinct genetic mutations (new antigens), similar to a thief's fingerprint, which normal cells do not have.
2. The vaccine helps the immune system identify the enemy: Tumor tissue from the patient is sequenced to identify up to 34 mutations that can activate the immune system, and a customized mRNA vaccine is produced (taking 6 weeks to develop). After injection, the mRNA prompts the body to produce these "fingerprint proteins," training immune cells (T cells) to recognize residual cancer cells.
3. Keytruda enhances the immune response: Tumors can suppress the immune system, making it difficult for them to detect cancer cells. Keytruda (a PD-1 inhibitor) acts like a key that unlocks the immune cells, allowing them to attack the cancer effectively.
Why melanoma? Because it has many mutations and thus more distinct "fingerprints," making it easier for the vaccine to target the disease. Many companies have failed in the past either because they did not identify the correct targets or because the immune response was insufficient. Moderna and Merck have combined three crucial factors: cheaper sequencing, more accurate algorithms, and Keytruda as a complementary therapy.
Why Are Merck and Moderna Collaborating?
This partnership is a mutually beneficial alliance:
- Moderna: Without COVID-19 vaccines, the company would struggle to survive. Revenue from COVID-19 vaccines in 2022 was $19.2 billion, but it dropped to less than $2 billion in 2025, resulting in four consecutive years of losses. Transitioning to cancer treatments is not a matter of choice but a necessity for survival. The CEO explicitly stated, "We are now a cancer drug company," hoping that this vaccine will boost sales.
- Merck: Their leading drug, Keytruda, is the best-selling medication globally (with sales of $8 billion in the first quarter of 2026), but its patent will expire in 2028. Without a new therapy, profits will decline. This vaccine needs to be used in combination with Keytruda to maintain exclusivity and high prices even after the patent expires.
The needs of both companies align perfectly: Moderna needs a new growth strategy, and Merck needs a successor for its successful product. Therefore, their collaboration has lasted for ten years without breaking down.
From 157 to 1137 Participants: Success Is Not a Fluke
This phase three success is not accidental; there were prior milestones:
- Phase two trials (2023, 157 participants): The combined therapy reduced the risk of recurrence by 49% and increased the five-year survival rate to 92% (compared to 71% with Keytruda alone).
- Phase three trials (2026, 1137 participants): The results from phase two were replicated in a larger sample size to confirm effectiveness (although only the achievement of phase three criteria was announced, not the specific risk reduction).
It's important to note that while the direction is correct, the actual efficacy is still unknown. For example, if the 49% reduction in risk seen in phase two is maintained in phase three, and data on overall survival times (how long patients live) are available, these will be crucial for FDA approval.
Even Success Does Not Guarantee Profit
Even if approved, this vaccine faces significant hurdles to profitability:
1. Production challenges: Traditional drugs are mass-produced, but this requires personalized treatment for each patient. The process from biopsy to vaccine production takes 6 weeks, and each step must be repeated for each individual. Moderna's current capacity is only sufficient for clinical trials; scaling up for tens of thousands of patients would require extensive new production lines, leading to high costs.
2. Pricing: A previous prostate cancer vaccine, Provenge, was priced at $93,000 per treatment and still resulted in losses. With the addition of Keytruda ( costing $100,000 per year), pricing will be even higher, and whether it can cover costs is uncertain.
3. Health insurance coverage: Insurance typically covers standard treatments, but this is a customized therapy, and not all countries' systems are prepared to reimburse such expenses. For example, it's unclear whether China's healthcare system would accept personalized pricing.
4. Efficacy in other cancers: Success in melanoma does not guarantee success in other types of cancer. These cancers have fewer mutations and more competitive therapies (developed by companies like AstraZeneca and Roche), so expanding the therapy's scope is uncertain.
There was also a brief market reaction: Before the stock price surge, Moderna had 13.5% short positions; many shorts were forced to close their positions during the rally, indicating that the rise was not entirely based on fundamental factors. The stock price will ultimately depend on actual sales data.
The Second Spring of mRNA Technology
This success is more than just a single vaccine; it represents the official recognition of mRNA technology as a viable platform for long-term applications:
- Previously, mRNA was labeled as a "COVID-19-related" asset, but now it has proven its potential in cancer treatments (a global market worth $240 billion). The business model is shifting from one-time government orders to ongoing payments for chronic diseases, which is what investors value.
- For Chinese mRNA companies, this indicates that personalized cancer vaccines have a viable path forward. The challenge now is to reduce the production time from 6 weeks to 2 weeks and lower costs.
Moderna's journey has been like a rollercoaster: it became a giant in 2020 due to COVID-19 but hit rock bottom in 2023. Now, it is reviving with cancer vaccines. However, this is just the beginning; there are many hurdles to overcome, including obtaining complete data, completing regulatory approvals, expanding production capacity, and expanding market reach.
Conclusion: This vaccine may not be a "savior," but it signifies the transition of mRNA technology from a temporary pandemic-related opportunity to a sustainable, platform-based technology. For Moderna, this is a milestone; for the entire industry, it marks the beginning of mRNA's role in cancer treatment. The road ahead is long, and whether this approach will be successful depends on overcoming the aforementioned challenges.