Moderna shares jumped 15% on Wednesday: this is why
Shares of Moderna Inc (NASDAQ: MRNA) jumped as much as 15% this morning after the biotechnology company built on an agreement it signed with Merck & Co Inc (NYSE: MRK) in 2016.
Moderna partners with Merck
On Wednesday, the Kenilworth-headquartered multinational exercised an option that enables it to work with Moderna on developing and eventually commercializing mRNA-4157/V940 – a personalised cancer vaccine.
The two companies, as per the press release, will equally share costs so long that the investigational vaccine is in development phase and then profits once it starts to generate sales.
Moderna’s mRNA-4157/V940 is currently being studied with Merck’s Keytruda as an adjuvant treatment for high-risk melanoma. Data from this mid-stage trial is expected in the fourth quarter of 2022.
Merck shares are keeping roughly flat on Wednesday.
Jim Cramer reacts to the news
Moderna, the press release confirmed, will receive $250 million as Merck exercises that option. Reacting to the news on CNBC’s “Squawk on the Street”, Jim Cramer said:
I think this man [CEO Stephane Bancel] is so underestimated. I think this stock is so underestimated. It’s extraordinary. This company is so different because it’s mRNA; because the man behind it is a dreamer executing so well on his dream.
His constructive outlook is in line with Wall Street that also wants you to buy Moderna shares as they have upside to $220 – about a 65% increase from here.
The Nasdaq-listed firm expects its COVID vaccine to generate $21 billion in sales this year. Its next quarterly report is scheduled for early next month.
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