Merck and Moderna's Cancer Vaccine Worked—Who Gets Paid?

Key Points

• Merck and Moderna's melanoma vaccine combined with Keytruda cut recurrence or death risk by 42% in a Phase 3 trial, though results fell short of expectations.
• Moderna shares fell nearly 18% on the news since the vaccine is central to its valuation, while Merck shares slipped only about 1% because the drug is a smaller part of its business.
• Merck reports third-quarter earnings on Oct. 29, and investors will watch for details on regulatory filing timing, its post-2028 Keytruda strategy, and launch economics for the vaccine.

Merck & Co. NYSE: MRK and Moderna NASDAQ: MRNA just cleared a bar no cancer vaccine had cleared before. Their personalized melanoma vaccine succeeded in a Phase 3 trial. Adding intismeran autogene to Keytruda cut the risk of recurrence or death by 42% versus Keytruda alone.

But investors sold both the rumor and the news. Detailed results leaked on Oct. 22, two days before the scheduled ESMO presentation. MRNA shares fell nearly 18% that day and kept sliding into Monday. MRK slipped about 1%.

The problem was the anchor behind the headline number. Investors had hoped for a repeat of the roughly 49% reduction seen in the smaller Phase 2b study. RBC Capital Markets said the Phase 3 result landed at the low end of expectations. For a stock like MRNA that had climbed more than 500% this year, the low end was enough to break the momentum.

Investors now have to work out who captures the value, and the answer looks very different for each partner. Merck reports third-quarter results before the market opens on Thursday, Oct. 29. That call is the next chance to hear how it plans to monetize the win.

What the Trial Actually Showed

One caveat matters. The 42% figure measures recurrence-free survival, not overall survival. Overall survival data aren't mature yet, though the companies reported a favorable early trend. The study continues to track it.

INTerpath-001 enrolled 1,137 patients whose stage IIB to IV melanoma had been surgically removed. After a median follow-up of 24.6 months, the hazard ratio was 0.58. At two years, 82.2% of patients on the combination were recurrence-free, versus 70.0% on Keytruda alone.

The combination also cut the risk of distant metastasis or death by 38%. TD Cowen called that figure favorable but below elevated expectations. Bulls, however, see encouragement in the timing of the results.

During the first six months, the vaccine combination performed similarly to Keytruda alone. But after six months, once the vaccine had time to train the immune system, analysis showed a 58% reduction in the risk of recurrence or death. That delayed benefit is encouraging because it suggests the vaccine is working as intended and could provide lasting protection against cancer recurrence.

Moderna: A Valuation Built on a Product With No Sales

For Moderna, intismeran is close to the whole story. Its COVID franchise has shrunk sharply, and it reported a $782 million net loss last quarter. That was the sixth consecutive unprofitable quarter.

At about $184 per share, the market still values Moderna at over $70 billion. Most of that rests on a product that hasn't generated a dollar of revenue.

That doesn't mean the upside case isn't real. William Blair projected Moderna could book $5.4 billion in peak annual melanoma sales under its 50-50 split with Merck. Lung cancer is the bigger prize, with multiple Phase 3 trials underway. But those readouts are years away, so melanoma has to carry the valuation for now.

Execution adds risk. Each dose is built from one patient's tumor, then manufactured for that patient alone. Scaling that process commercially is untested. Leerink Partners warned in August that the rally set expectations that would be difficult to meet. Last week showed how little room for error the stock has.

Merck: Helpful, But Not a Keytruda Replacement

Merck's math is different. Keytruda generated $31.7 billion in 2025, and its compound patent expires in December 2028. Management has promised a "shallow dip" after that, followed by a fast return to growth. Intismeran fits that plan, but it can't fill the hole alone.

Half of a multibillion-dollar melanoma franchise is meaningful. Still, it's small next to Keytruda's scale. That explains why Merck shares barely moved while Moderna's swung wildly. For Merck, the vaccine is one bridge among several, alongside newer drugs like Winrevair and a string of acquisitions.

There's also a twist. The regimen is built on Keytruda, which could keep patients on Merck's drug after biosimilars arrive. But a biosimilar could also serve as a backbone. That's where Keytruda Qlex, the subcutaneous version with later patent protection, becomes strategically important.

How the Partners Split the Value

The deal terms explain the lopsided stock reactions. Merck exercised its option on the program in 2022 and paid Moderna $250 million. Since then, the partners have shared development costs and any profits equally. The economics are even, but the weight on each balance sheet is not.

A 50% share of intismeran profits could reshape Moderna's income statement. The same share would barely move Merck's. That's why MRNA reacts with more volatility to every shift in the hazard ratio. By contrast, Merck shareholders can focus on the bigger post-2028 picture.

Merck's Earnings: 3 Things to Watch For

Merck's approaching earnings call won't be about melanoma alone. Investors will want updates on Keytruda, Winrevair, and full-year guidance. Still, a few intismeran questions deserve attention.

First, filing timing. The companies say they are engaging with regulators. Listen for whether submissions are planned for this year or 2027, and in which regions. The therapy already holds FDA Breakthrough Therapy designation, which could support a faster review.

Second, the post-2028 plan. Does management count intismeran as part of the Keytruda bridge? Will it pair the vaccine with Keytruda Qlex rather than the IV version? That choice would signal how Merck plans to defend the franchise.

Third, launch economics. Listen for manufacturing capacity, turnaround time from biopsy to dose, and how shared costs affect 2027 spending. Any comment on overall survival timing or lung cancer readouts would also matter.

Merck Vs. Moderna: Which Stock Gains More From the Cancer Vaccine?

Intismeran worked, and it will likely reach patients. But approval won't split the value evenly in practice. Moderna needs this product to justify its valuation. Merck needs it to matter as one piece of a larger puzzle. Thursday's call should show how big Merck thinks that piece is.