United States, Institutional
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Biotech backdrop and innovation
Biotech stocks have continued to experience positive market conditions this year due to clinical successes, an uptick in deal volumes, and a relatively benign policy & regulatory backdrop. September was more challenging, owing to rising US government bond yields and a slowdown in private and public biotech fundraising activity. As we approach the European Society for Medical Oncology (ESMO) annual meeting in late October, therapeutic cancer vaccines remain an area of interest. Unlike preventive vaccines, which are designed to stop infection before it occurs, therapeutic cancer vaccines are intended to help the immune system recognize and attack existing cancer cells. They may be used in the adjuvant setting, or after surgery, to reduce the risk of recurrence. In August, Moderna and Merck announced that, in a large study of early-stage adjuvant melanoma patients, their experimental personalized mRNA vaccine intismiran had succeeded in reducing the risk of cancer recurrence or death.1 Details will be presented at the ESMO meeting in a few weeks.
A watershed moment for the biopharma industry
The positive results of intismiran in melanoma surprised the market, given the mixed outcomes for earlier cancer vaccine programs and Moderna’s own corporate history in vaccine development. Early-stage studies of intismiran had shown promise in a small number of melanoma and other solid tumor patients, so these headline Phase 3 data seemed to confirm that biology. The individualized therapy consists of a synthetic mRNA coding for up to 34 neoantigens informed by the genetics of a patient’s tumor and a proprietary algorithm. Neoantigens are abnormal protein fragments created by mutations in a patient's cancer. These proteins are generally absent from healthy cells, making them highly specific targets for the immune system. Moderna and Merck chose to study intismiran in tumors known to be sensitive to immunotherapy, including Keytruda, Merck’s flagship immunology drug which has impacted outcomes in melanoma, lung and several other cancers. Working together, Keytruda helps activate immune cells, while the personalized vaccine is intended to help those cells recognize tumor-specific targets. Clinical development for intismiran has focused on the adjuvant setting, where tumors are localized enough to be resected (surgically removed) although patients are at high risk of recurrence. Intismiran and future generations of cancer vaccines by Moderna and other companies may demonstrate varying levels of effectiveness across different tumor types. Their potential role in more advanced or metastatic cancers remains an area of ongoing clinical investigation. Details of the melanoma result at ESMO will help confirm the biological effect in melanoma, including its durability. However, it remains unclear how well those findings will translate to other tumor types, later-stage disease, or long-term survival outcomes.
A potential market opportunity
The adjuvant melanoma setting is one area being evaluated for cancer vaccines. Depending on further clinical trials and outcomes, our team estimates a market opportunity approaching $10bn. A favorable safety profile and convenient administration alongside Keytruda could support broader adoption if supported by clinical outcomes. If efficacy is also demonstrated in lung, bladder, and renal cancers, the potential commercial opportunity could expand beyond the melanoma setting. Evidence in those tumor types will emerge in 2027/28.
We also appreciate the differentiated nature of personalized mRNA cancer treatment and think the approach may present meaningful development and commercialization challenges for potential competitors. Each dose begins with sequencing a patient's tumor, followed by neoantigen selection, design of a patient-specific mRNA construct, and manufacturing within a short timeframe. In addition to patents and biologic exclusivity, intismiran will be protected by trade secrets including its proprietary algorithm which will likely evolve over time with FDA approval. That algorithm is central because it determines which neoantigens are most likely to generate an effective immune response. This could enhance the strategic value of the franchise to Merck and Moderna and may help strengthen its competitive positioning relative to other developers pursuing similar approaches, such as China-based competitors.
Taking a step back, we view Moderna's recent clinical progress as an example of the potential of genetic medicine – here harnessed to ‘train’ one’s own immune system to suppress a tumor, but in other iterations like gene silencing or exon skipping, used to turn off or correct protein production intracellularly. Gene silencing reduces the production of a disease-causing protein, while exon skipping changes how a cell reads genetic instructions so that it may produce a more functional protein. Such medicine could prove relevant for its specificity, impact on disease biology, and patient-friendly features such as benign side effect profiles and infrequent dosing.
Intismiran’s positive result in adjuvant melanoma was a watershed moment for the biopharma industry and may contribute to the advancement of a new category of cancer medicines that improves overall survival rates for millions of people. Data this month and in the years ahead will determine the extent of that potential.
1Moderna 2026.
The views expressed are those of the author at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional and institutional investors only.
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