By Joshua Mazher, Biotech Equity Analyst
Cancer remains one of the most challenging diseases in the U.S. In the previous year alone, there were at least two million new cancer diagnoses. Unfortunately, this statistic is expected to rise by the end of 2023, leaving the scientific world searching for more effective treatments to this universally dreaded disease. A vital new approach is finally materializing as Merck and Moderna recently released a bombshell statement on the matter.
On July 26, 2023, big pharma giant Merck announced to the public that its cooperation with Moderna in developing a cancer vaccine that targets melanoma – the most deadly type of skin cancer – is now entering a phase III study. Cancer vaccinations have been almost mythical ever since research began. However, this myth may materialize into reality sooner than later, as more and more biotech companies seem to be adopting cancer vaccinations in their pipelines. That said, with the recent developments of Merck and Moderna, investors should expect an incoming wave of cancer vaccinations on the horizon. Those who get in early may benefit tremendously.
Merck’s flagship immunotherapy product Keytruda has been a staple in the field of oncology ever since it first debuted in 2016. Meanwhile, Moderna has been utilizing its own successes from the pandemic in order to fund the development of its mRNA-4157/V940 vaccine, or just V940 in short. V940 is designed to be an investigational mRNA personalized cancer vaccine and in a nutshell, Merck and Moderna plan to pair Keytruda with the V940 vaccine in order to enhance Keytruda’s abilities.
This phase III study indicates that the world is one step closer to seeing a personalized cancer vaccine hit the shelves, one with the unprecedented ability to target solid-body tumors like Melanoma. The specific perk of an enhanced immunotherapy drug is that it reduces the chances of the tumor returning. Often as is the case with chemotherapy and immunotherapy, solid-body tumors are especially prone to returning after some time. This malignant feature is the key reason why cancer is so deadly and usually lasts a lifetime once a patient develops it. However, in V940, there is “a single synthetic mRNA coding for up to 34 neoantigens that is designed and produced based on the unique mutational signature of the DNA sequence of the patient’s tumor”. The result makes the probability of the tumor returning much lower than before, effectively “curing” the cancer once the tumor is removed. The partner companies announced breakthrough results from a phase II trial, for the first time demonstrating that a cancer vaccine can work.
While this news marks a milestone in the development of oncology as a whole, experts predict that the drug won’t be available for purchase until at least 2029. That said, the trend of cancer vaccines is quickly growing, with biotech companies like BioNTech, Gritstone bio leading the way
Competitors in the Vaccine Race
BioNTech ($BNTX) has one of the largest oncology pipelines in the world and is renowned for its focus on novel therapeutics. Similar to Moderna, BioNTech is using their earnings from COVID-19 to help harness a new generation of cancer research, and research they certainly have done. In their oncology-focused pipeline, they already have 8 candidates in phase II trials, a protein-based therapeutic drug class in phase III, and 18 candidates in phase I. For investors looking to own a company with a broad oncology pipeline, with a handful of highly prospective drugs on the horizon, BioNTech is an excellent option. Big pharma giant Roche has already partnered with BioNTech for their work on a cancer vaccine that is targeting pancreatic cancer, which will likely encourage other large biotech firms to consider a partnership in the future. Cancer therapeutics are a growing force in the biotech world, with a CAGR of 9.1% between 2021-2030. This means that the size of the oncology market should roughly double every 8 years.
Another company with a notable program in their cancer pipeline is a relative newcomer, Gritstone Bio ($GRTS). Founded in 2015, Gritstone has committed itself to developing vaccines that target a patient’s own immune system and use it to fight unwanted cancer tumors that may be lingering post-chemotherapy. Sound familiar? It should be since this is synonymous with the V940 vaccine developed by Moderna mentioned at the beginning of this article. As we can see, cancer vaccines are picking up steam across the biotech industry, and the practice will inevitably be broadcasted to the healthcare industry as a whole sooner rather than later. Going back to Gristone, their flagship cancer vaccine program is called GRANITE, an individualized neoantigen vaccine program. What makes GRANITE unique is its ability to target early cancer in a person’s body, and then trigger the production of specific T-cells within a person’s own immune system to further enhance its performance in eradicating tumor cells. Currently, GRANITE is in phase II out of III and is steadily making progress. With a market cap of $159.16 million, the company is faring quite well given that it hasn’t been in the industry for even a decade yet. But a market capitalization under $200 million, makes Gritstone just a minnow in a world of hungry, ravenous big fish. If they continue to demonstrate clinical success, they are a likely acquisition target for a larger company that wants to jump on the vaccine bandwagon. These kinds of transactions are often lucrative for shareholders who got in at the right price.
To summarize, cancer vaccines represent a promising new avenue in the fight against cancer. Unlike traditional vaccines that aim to prevent infectious diseases, cancer vaccines work to stimulate the body’s immune system to recognize and attack cancer cells specifically. Oncologists estimate that creating treatments that are personalized and patient-specific will allow our body’s natural immune system to adjust to the cancerous cells much better. Tangentially, this methodology ensures a safer option compared to traditional chemotherapy, which oftentimes harms a patient more than helps them in the long run. By accelerating the immune system’s response to certain antigens, cancer vaccines aim to enhance the effectiveness of our natural body’s ability to fight off cancer. The demand for such cancer vaccines is growing each day, and it is only a matter of time before prescription cancer vaccines start becoming available for purchase. Nonetheless, the drugs won’t be cheap by any estimation, and we are still a ways away before any of these vaccines can become mass-produced. However, cancer vaccines are inevitably the future, and investors would be wise to purchase shares while the drugs are still in production and before the commercialization process truly begins. Sometimes there are real rewards for shareholders who jump on a trend before it enters the limelight.