Moderna Stock Surges 177% As Cancer Vaccine Trial Shakes Up Bearish Bets

Moderna's stock delivered one of the year's biggest shocks to bearish investors after surging 177% in a single session, wiping out an estimated $5.5 billion from short sellers who had bet against the vaccine maker.

The explosive rally came after Moderna and Merck said their personalised mRNA cancer vaccine had met key goals in a late-stage melanoma trial, dramatically changing investor sentiment around a company whose shares had remained under pressure as demand for its Covid-19 vaccine declined.

"This is an exceptionally painful move for Moderna shorts," Matthew Unterman, managing director at S3 Partners, said. "Today's move materially changes the risk/reward for anyone maintaining a bearish position."

According to S3 Partners data cited by Bloomberg, Wednesday's rally pushed Moderna short sellers' mark-to-market losses for the year to about $7.7 billion.

Cancer Vaccine Trial Triggers Rally

The trigger for the surge was the late-stage trial of intismeran autogene, a personalised cancer vaccine that Moderna is developing with Merck.

The treatment is designed around the genetic characteristics of an individual patient's tumour. Researchers analyse a tumour after surgery, identify its specific mutations and use mRNA technology to create a vaccine intended to train the immune system to recognise and attack cancer cells.

The companies said the treatment, when used alongside Merck's pembrolizumab, reduced the risk of melanoma recurrence in the Phase 3 study.

The trial enrolled 1,137 patients whose melanoma had been surgically removed. Participants received either the personalised vaccine combined with pembrolizumab or pembrolizumab alone.

The companies plan to present detailed results at a medical conference and begin regulatory submissions.

The result is significant because personalised mRNA cancer vaccines have long been viewed as a potentially important application of the technology that powered the Covid-19 vaccine revolution.

"This is proof of principle that personalised cancer vaccines work," Marco Gerlinger, an oncologist and professor at London's Barts Cancer Institute, told AFP, while cautioning that the companies' initial announcement contained limited detail.

Lennard Lee, an oncologist and assistant professor at the University of Oxford who was not involved in the study, described the findings as "very encouraging" and said the full dataset would be important to assess the results.

Short Sellers Face More Pressure

The scale of Moderna's rally has raised the possibility of further losses for traders still holding short positions.

Short interest in Moderna had climbed to as much as 20% of its tradable share float earlier this year before easing to roughly 14%, according to S3 Partners data.

About 20 million shares, or roughly a quarter of short positions, had already been covered in 2026, Unterman said. The latest surge could force more bearish investors to close their positions, potentially adding further upward pressure on the stock.

Moderna's shares had already gained 114% this year before Wednesday's explosive rally. Even after the increase, however, the stock remained far below its pandemic-era peak following four consecutive years of declines that had erased almost 94% of its value from its 2021 high.

Moderna Bets On Life Beyond Covid Vaccines

The melanoma result could help Moderna shift the narrative around its business as the company works to reduce its dependence on Covid-19 vaccines.

Investors have increasingly been looking towards its flu vaccine and other products to drive future growth.

Wall Street analysts responded positively to the cancer-vaccine results. Needham analyst Joseph Stringer, as cited by Bloomberg, described the melanoma trial as a "landmark win" and said the result could make oncology a major future growth driver for Moderna.

William Blair analyst Myles Minter upgraded the stock to outperform from market perform, saying the company now had a clearer path towards diversifying revenue beyond Covid vaccines.

Merck also benefited from the announcement, with its shares rising sharply in US trading.

Moderna and Merck are testing intismeran autogene beyond melanoma, including in lung, bladder and kidney cancers, according to Moderna CEO Stephane Bancel.

"Today marks an extraordinary milestone for Moderna, for mRNA science and, most importantly, for patients with cancer," Bancel said in a statement.

For Moderna, the immediate impact was financial as well as scientific. A company that had become a major target for bearish investors has produced a late-stage clinical result that could force short sellers to reconsider their positions and potentially add further momentum to the stock.