Moderna (MRNA.O) shares more than doubled on Wednesday, adding about $30 billion to its market value, after promising late-stage data on its personalized mRNA cancer therapy developed with Merck (MRK.N) sent investors piling into the stock.
The therapy is central to Moderna's efforts to prove that its mRNA technology can succeed beyond its COVID-19 vaccine franchise and infectious disease shots, as it seeks to build a more durable revenue base. The company recently added a flu vaccine to its portfolio and is advancing experimental vaccines for conditions including norovirus and Lyme disease.
Analysts had noted the cancer vaccine data could be an important catalyst for the company and potentially strengthen investor sentiment.
"A successful trial gives investors stronger evidence that mRNA technology can have a meaningful future beyond infectious diseases," said Lale Akoner, global market strategist for eToro.
Investors are also assessing the potential commercial opportunity from the treatment, said Peter Andersen, founder of Andersen Capital Management in Boston.
"Investors are probably trying to estimate the gain in revenue and earnings from such a medication if it does exist," Andersen said, adding that an effective treatment for a common cancer could be "extremely profitable for the company."
The vaccine, intismeran, reduced the risk of recurrence and spread of skin cancer when combined with Merck's blockbuster immunotherapy drug Keytruda, in a late-stage trial.
The Nasdaq biotech index (.NBI) rose 4.4% to a fresh record high, helped by a boost in Moderna's shares. U.S.-listed shares of BioNTech climbed 20% and Novavax (NVAX.O) rose 6%.
Shares of Moderna were trading at a two-year-high of $140.19 and were on track to add about $30 billion to the company's market capitalization. The trading volume was more than 15 times the 50-day average, as per data from LSEG. Merck climbed 10% to an all-time high.
Leerink Partners analysts now expect about $1.4 billion sales potential for the therapy by 2032, up from their previous projection of up to $1.2 billion.
SHORT SELLERS STRUGGLE
Investors betting against Moderna's shares faced record one-day losses following the upbeat data.
"With each shorted share now down almost $100, that is exactly the kind of pressure that can trigger a squeeze," said Peter Hillerberg, co-founder of ORTEX.
"There is clearly a real catalyst behind a move this size, but with a short base this large, shorts scrambling to cover are adding fuel and can keep driving the price higher."
Short interest in Moderna's shares stood at 13.5% of the free float as of Wednesday, making it one of the most-shorted large-cap stocks, according to ORTEX.
