Moderna's COVID Vaccine Was a Historic Success. Could Its Cancer Vaccine Be Even Bigger?

Moderna (NASDAQ: MRNA) has skyrocketed by more than 460% over the past 12 months as the company has made outstanding clinical and regulatory progress. Notably, Moderna earned approval for mFLUSIVA, an influenza vaccine that beat some competing vaccines in phase 3 studies. This new product should meaningfully contribute to the biotech's financial results over the medium term. But there was an even bigger win for Moderna recently: The company's investigational personalized cancer vaccine (also known as an individualized neoantigen therapy), intismeran autogene, posted excellent phase 3 clinical trial results, sending the stock soaring.

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Innovation pays off

To understand the magnitude of this recent development, let's rewind the clock a bit. Moderna has been a pioneer in mRNA technology, and the company demonstrated the potential of its approach by quickly developing and marketing Spikevax, a COVID-19 vaccine. Spikevax became one of the first mRNA products ever to earn approval from the U.S. Food and Drug Administration, and it was wildly successful. It generated peak sales of $18.4 billion in 2022 and, overall, is approaching $50 billion in lifetime sales.

However, demand for coronavirus vaccines has declined in recent years, and Spikevax is no longer a reliable growth driver. Further, many investors worried that despite Spikevax's success, Moderna would struggle to expand beyond infectious diseases. That fear made perfect sense. Sure, Moderna is developing several mRNA-based cancer therapies, but no mRNA-based vaccine has ever been approved for cancer.

That could change soon. In a phase 3 study, intismeran autogene posted meaningful, statistically significant improvements in recurrence-free survival in patients with melanoma. This isn't just a clinical trial win for Moderna. It also helps the company demonstrate that its approach could be effective beyond infectious diseases and in oncology.

Will intismeran autogene exceed Spikevax's success?

Intismeran autogene, which Moderna is developing in collaboration with Merck (NYSE: MRK), is targeting many indications beyond melanoma. It is being tested across cancers of the lung, bladder, and kidney. It may or may not prove effective in these other areas, but overall, it could target a large patient population at its peak. Will it generate more sales than Spikevax did for Moderna?

On the one hand, Spikevax earned approval in the middle of a worldwide pandemic. Demand for the vaccine was incredibly high, and competition was somewhat limited. Its sales ramped up quickly, reaching their peak in just a couple of years. However, intismeran autogene should have a more conventional sales trajectory. That means it won't reach its peak sales nearly as fast, but it could experience more consistent demand over a much longer period.

Sales estimates for intismeran autogene vary wildly, but according to some analysts, it could generate $16.8 billion in revenue by 2035. Moderna will have to split the profits and costs equally with Merck. Even so, intismeran autogene could eventually rival Spikevax's lifetime sales while powering consistent revenue growth for Moderna over the next decade.

Is Moderna stock a buy?

Moderna isn't done innovating. The company has a pipeline full of products across other infectious diseases and cancers. Some may argue that Moderna's current market cap of $57.4 billion is too high for a biotech company that currently generates little revenue and is unprofitable. However, this value reflects the market's confidence not only in Moderna's key assets like intismeran autogene or the recently approved mFLUSIVA, but also in early stage clinical trial candidates that could be highly successful down the road. Naturally, there is plenty of risk. Moderna could run into clinical and regulatory setbacks.

But the company has experienced several of those in recent years -- including a phase 3 failure for its cytomegalovirus vaccine, mRNA-1647 -- and has overcome them to get to where it is today, largely thanks to its deep pipeline and expertise in developing mRNA-based products. That's a strong advantage that may allow the company to overcome clinical trial failures and still earn enough wins to improve its lineup over the medium term. That's why Moderna remains an attractive stock.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Merck and Moderna. The Motley Fool has a disclosure policy.