Moderna Surges as Biotech Stocks Outperform Weaker Medtech Sector

Healthcare stocks underperformed the broader market in September, with the Health Care Select Sector SPDR Fund XLV falling 1.89% while the SPDR S&P 500 ETF Trust SPY gained 0.27%. The sector's weakness was broad-based across medical devices, healthcare equipment, and selected healthcare services names.

However, biotechnology and life-science tools stocks posted some of the strongest gains, led by Moderna MRNA, Illumina ILMN, and Revvity RVTY. Moderna surged 37.2% in September as investors continued to digest positive Phase 3 results for its personalized mRNA cancer vaccine, developed with Merck MRK.

Stephen Ayers, an analyst at Seeking Alpha, said that 'following the August 19 melanoma data, Moderna's MRNA stock continued to run. But investors are paying for a figure they haven't seen yet.' He noted that the ESMO presentation needs to show a hazard ratio close to the Phase 2b result (0.51) to justify at least part of this rally.