Cancer vaccines are finally showing promise

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The pandemic proved the efficacy of messenger RNA vaccines in fighting disease. But this was not the intention of the technology’s pioneers. They had other goals in mind, notably tackling cancer. That vision is now being put to the test, with promising early results.

The world’s first personalised mRNA cancer immunotherapy for melanoma has begun phase 3 clinical trials. The treatment, developed by Boston-based Moderna in conjunction with Merck, is intended to prevent the recurrence of cancer after surgery. Tailored to the tumour’s genetic signature, it prepares the patient’s immune system to attack malignant cells.

If the therapy lives up to the high expectations set by an earlier trial, it could be a blockbuster. Michael Yee of Jefferies reckons that treating melanoma patients alone could mean peak annual sales for Moderna of $1bn. That amounts to a present value of roughly $5bn, assuming a 75 per cent chance of success and an EV-to-sales multiple of 7. The latter is based on valuations of similar high-margin biotech businesses, discounted because peak sales would occur at the end of the decade at the earliest. Should the technology be effective against other tumours, its potential value would be multiples of that. 

Moderna’s treatment is part of a pipeline of vaccines and therapies being developed by the lossmaking company to fill the hole left by the slump in Covid-19 revenues. Similarly, Germany’s BioNTech is working on a range of new treatments as it faces dwindling coronavirus vaccines revenues. In April, it published early stage trial evidence that a mRNA therapeutic cancer vaccine triggered an immune response in some pancreatic cancer patients. However, like Moderna, it is involved in patent litigation. This adds uncertainty to the investment case.

Technology used in the Oxford/AstraZeneca Covid-19 vaccine is also being applied to cancer, albeit at an early experimental stage. University of Oxford, the Francis Crick Institute and UCL aim to create a vaccine that would protect against lung cancer. This is one of a handful of prophylactic vaccine projects worldwide, not counting well-established vaccines against cancer-linked viruses. Merck’s HPV vaccine, which protects against cervical cancer, is projected to make sales of nearly $10bn in 2024, according to Visible Alpha.

It has taken decades of research to get this far. There have been some crushing disappointments, such as the failure of prostate cancer vaccine pioneer Dendreon, which filed for bankruptcy protection in 2014.

Dendreon’s therapy was hampered by high production costs and questions over cost effectiveness. Its successors still have to overcome those hurdles. But there have been significant advances in targeting, delivering and combining therapies. That should give innovative vaccines a fighting chance of joining the expanding anticancer drug arsenal.

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