Moderna's Cancer Therapy Breakthrough Sparks Market Frenzy

Moderna's stock surged 177% on August 19 after the company announced positive results from its Phase 3 trial of an individualized mRNA cancer therapy, intismeran autogene. The therapy, developed with Merck, met both primary and secondary endpoints in a trial involving 1,137 patients with surgically removed melanoma.

The market reaction was significant, with Moderna's stock closing at $174.38, roughly 19 times its three-month average trading volume. Short sellers on Moderna took record one-day losses, with each shorted share down about $100.

BioNTech, another company developing mRNA-based cancer therapies, saw its stock rise 22% in the wake of Moderna's news. However, analysts have noted that BioNTech has yet to enter Phase 3 trials for its own individualized neoantigen therapy program, and may not benefit as directly from Moderna's success.

The analyst scramble following the announcement was revealing, with Morgan Stanley raising its target to $89 from $39, Goldman Sachs going to $120 from $67, and BofA upgrading Moderna to Neutral from Underperform. However, most new targets do not even breach $100, suggesting a disconnect between the market's enthusiasm for Moderna's stock and the analysts' views on its valuation.