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Moderna shares plunged as much as 25% on Thursday after partial data leaked from a closely watched cancer vaccine trial conducted with Merck. The selloff struck even though the complete results, released later that day, appeared meaningful for patients and positive compared with Wall Street expectations.

Merck shares also declined following the leak. The market reaction reflected the enormous expectations investors had placed on the personalized vaccine, known as intismeran autogene, rather than a clear failure in the trial results.

The vaccine, when paired with Merck’s immunotherapy Keytruda, reduced the risk of recurrence or death by 42% in certain melanoma patients compared with Keytruda alone. It also reduced the risk of cancer spreading to distant parts of the body or death by 38%.

About 82% of patients who received the personalized vaccine with Keytruda remained alive without their melanoma returning two years after treatment. That compared with 70% of patients who received only Keytruda.

“This is a huge development for our patients,” said Dr. Hussein Tawbi, a melanoma expert and trial investigator at the University of Texas MD ​Anderson Cancer Center. Tawbi said the vaccine’s added benefit also came with much milder toxicity, including side effects such as injection site pain, compared with other cancer treatments.

The detailed phase 3 results were scheduled for presentation at the European Society for Medical Oncology conference over the weekend. A separate analysis showed an even larger benefit after the six month vaccine regimen, including a 58% reduction in the risk of recurrence or death.

The companies cautioned that it remains too early to determine whether the treatment helps patients live longer overall. That unresolved question leaves more work ahead even as the trial produced evidence of additional benefit beyond Keytruda.

“Whenever you put a therapy on top of something that works really well, like Keytruda, sometimes it’s harder to show additional benefit. We have no problems of showing additional benefit here,” Dr. Dean Li, Merck Research Laboratories president, said before the full results were released.

Several analysts acknowledged that expectations had become elevated ahead of the announcement, while describing the underlying findings as positive. BMO Capital Markets analyst Evan Seigerman called the relative reduction in recurrence or death clinically meaningful.

UBS analysts described the results as “overall a strong data set.” They said the findings increased their confidence in upcoming studies of the vaccine involving kidney and bladder cancers, while suggesting the stock reaction reflected massive expectations rather than disappointing data.

Those expectations had been building alongside a dramatic run in Moderna shares. As of Thursday afternoon, the stock had surged more than 530% for the year, creating a demanding backdrop for the data release.

Merck, a much larger drugmaker, fell about 1% on Thursday. Its shares had climbed nearly 41% during the year, a substantial gain but far below Moderna’s explosive advance.

Oncologists and investors view the targeted vaccine as a possible breakthrough treatment with potential applications in other cancers. Merck and Moderna are studying it in several trials across tumors including non-small cell lung cancer, bladder cancer and renal cell carcinoma.

Li nevertheless acknowledged that the companies still must demonstrate that the product can work across multiple tumor types. “I can dream of creating a log cabin, but we got some wood chops, and we’ve just knocked down one tree,” Li said. “Knocking one tree does not give you a cabin or a village.”

The vaccine is designed around the specific mutations found in each patient’s tumor rather than a uniform treatment model. Its purpose is to train the immune system to identify and kill unique cancer markers, while Keytruda helps the body attack the cancer more effectively.

For Moderna, the treatment could become a critical additional commercial product following its vaccines for Covid-19, flu and respiratory syncytial virus. The personalized manufacturing process currently takes six weeks, although Merck CEO Robert Davis said the company believes that timeline can eventually be shortened.

A faster manufacturing process could allow the vaccine to reach more patients more quickly. For now, the sharp stock decline stands in stark contrast to trial data that analysts and investigators described as meaningful, leaving inflated expectations as a central explanation for the market’s punishing response.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.