Moderna captured most of the attention after its experimental cancer vaccine succeeded in a late-stage trial. Its shares rose 177% in one day, while Merck gained a comparatively modest 12.6% in response.
However, the long-term significance may be greater for Merck than the difference in share-price movements suggests. The result gives Merck a potential multibillion-dollar product, strengthens the position of Keytruda in cancer treatment, and provides an important new defense against the patent cliff facing its largest franchise.
The breakthrough does not solve every problem in Merck’s future. It does, however, make the company’s path beyond Keytruda considerably easier to see.
What the Merck, Moderna Cancer Vaccine Means for Both Companies
Recently, Moderna’s late-stage melanoma trial of intismeran, a personalized cancer vaccine jointly developed by Moderna and Merck, succeeded. The result moves intismeran closer to regulatory approval and validates the potential of personalized mRNA technology in cancer treatment.
For Moderna, it shows that its mRNA technology may have valuable applications beyond infectious-disease vaccines. For Merck, it shows that Keytruda could potentially be combined with a new type of treatment to produce better results and create an additional revenue stream.
Moderna and Merck began their personalized cancer-vaccine collaboration in 2016, when mRNA technology was still unproven and Moderna had no approved products. Merck initially paid Moderna $200 million to fund early research and help build the specialized manufacturing capacity required to produce a different treatment for each patient.
The agreement gave Merck the right to join the program after early studies provided sufficient evidence that the technology could work. Merck exercised that option in 2022 and paid Moderna another $250 million. The companies agreed to share development costs and any profits from the personalized cancer-vaccine program equally.
Merck is not simply supplying Keytruda for a Moderna trial. It is a co-developer and co-commercialization partner with a 50% economic interest in intismeran.
The arrangement gives Merck two potential sources of value. First, it receives half of the profits generated by intismeran. Second, patients receiving the combination will also use Keytruda, which remains Merck’s product. This partnership may produce more income for Merck than what we can see on the surface.
Before the announcement, Moderna was still struggling to prove that it could build a durable business after the decline in COVID-19 vaccine sales. Intismeran’s success changed the perceived value. About 14% of the public float was sold short before the announcement, which also contributed to the rally with a short squeeze. As a larger, more diversified pharmaceutical company, Merck saw a more measured increase than Moderna.
Looking Beyond Moderna’s 177% Stock Surge
Looking at market capitalization, Moderna’s 177% surge added approximately $44.5 billion and Merck’s much smaller 12.6% gain added about $42.1 billion. This resonates with the 50-50 sharing of intismeran (autogene) between the two companies. That being said, although Moderna’s surge is eye-catching, Merck, which shares half of the interest in intismeran and can strengthen the demand for Keytruda, is the power behind the stage that we should pay closer attention to.
The relationship between the two stocks will remain strong around intismeran-related events, including regulatory decisions, commercial-launch plans, manufacturing updates, and results from studies in other cancers. Outside those events, their performance is likely to diverge. Moderna remains highly sensitive to the perceived value of its mRNA technology, while Merck is also influenced by Keytruda sales, new-product launches, acquisitions, drug-pricing policy, and the rest of its pipeline. They share the economics of one important program, but they are not interchangeable investments.
How Intismeran Could Support Keytruda
Keytruda remains both Merck’s greatest strength and its largest long-term risk. Keytruda and its newer subcutaneous formulation generated approximately $8.4 billion in the second quarter, representing more than half of Merck’s total sales. However, core patent protection begins to expire later this decade, raising concerns about lower-priced competition and declining revenue.
Although intismeran could not fully protect Merck’s future sales even with optimistic sales estimates, viewing the vaccine only as a replacement product could understate its strategic value.
The combination could help Merck in three ways. First, Merck will receive half of intismeran’s profits. Second, the combination could support or expand Keytruda use in patients who have undergone melanoma surgery. Third, success in melanoma increases confidence that the same approach may eventually work in larger cancer markets.
The third benefit could matter most. Merck and Moderna are studying intismeran in several other cancers, including lung, bladder, and kidney cancer. Melanoma is the first commercial opportunity, but success in larger markets will determine whether intismeran becomes merely a useful new product or a major cancer-treatment platform.
This creates valuable optionality for Merck. The current result supports a potential melanoma launch, while every additional successful trial could expand the commercial opportunity. Merck secured half of that opportunity before the successful late-stage result dramatically increased the project’s value.
Merck Is Building Growth Beyond Keytruda
The Intismeran result arrives at a favorable point in Merck’s broader transition.
Second-quarter sales increased 5% to $16.6 billion, and management raised its full-year revenue forecast to between $66.3 billion and $67.3 billion. Winrevair sales rose 75% to $588 million, while Keytruda Qlex, the subcutaneous version of Keytruda, generated $463 million as its launch accelerated.
These products show that Merck is building additional sources of growth. Winrevair, Capvaxive, Ohtuvayre, Keytruda Qlex, and a large development pipeline give Merck several ways to soften and cover the eventual decline of its largest product.
Intismeran now becomes one of the most credible assets in that transition. Many experimental drugs look promising in early research but never reach the market. Intismeran has now succeeded in a large late-stage trial against an established treatment. It still faces regulatory and commercial risks, but it has moved much closer to becoming an actual source of revenue and profit.
What Investors Still Need to Know About Intismeran
The companies have announced that the trial succeeded, but they have not yet released all the detailed results. Investors still need to learn how large the improvement was, whether the benefit was consistent across different patient groups, and whether the treatment eventually helps patients live longer. There is also no guarantee that the melanoma result can be repeated in other cancers.
Commercial execution may be an even greater challenge. Intismeran is not a standard medicine produced in identical doses for every patient. Each treatment must be designed and manufactured using information from that individual patient’s tumor. This personalized process creates concerns about commercialization. Cost control, production speed, and insurance reimbursement are among the many factors that can keep a successful treatment from becoming profitable.
Overall, Intismeran’s success represents more than a promising cancer treatment. For Moderna, it provides evidence that its mRNA technology could deliver greater profitability beyond COVID vaccines. For Merck, the early action of partnership reflects management’s foresight in preparing for its approaching patent cliff.