Merck's Hidden Gold in Moderna's mRNA Milestone
Moderna Inc. and Merck & Co. have made history by delivering the first positive Phase 3 readout for an individualized mRNA cancer therapy, intismeran autogene (mRNA-4157/V940). This achievement has sent Moderna's stock soaring, but it may be Merck's stake in this data that holds more significance for long-term investors.
The partnership between the two companies dates back to 2016 and was amended in 2018. Merck paid an upfront fee of $200 million and another $250 million in September 2022, triggering the 'Merck Participation Term.' Under this arrangement, both companies split costs and profits equally worldwide.
Despite having a smaller percentage move than Moderna's, Merck's market cap rose by around $35.6 billion on Wednesday, surpassing its gain of roughly $25.7 billion. Merck also had an already-bullish analyst base with most covering analysts rating it a Buy and an average price target of $130.
Merck's Keytruda patent cliff looms in 2028, but the company has been working on diversifying its revenue streams. Intismeran is a prime example of this strategy, creating a differentiated regimen that biosimilar makers cannot easily replicate.