Interpreting drug trial data releases is difficult in the best of circumstances. And usually, it’s just a problem for the subset of investors who focus on the sector. In the middle of a pandemic, a whole world is throwing money around on press releases, and it’s making a mess of expectations and the market.
U.S. stocks soared Monday on the publication of early human vaccine data from Moderna Inc., only to reverse course Tuesday after an article from the excellent health news publication Stat highlighted its limits and the long and highly uncertain path ahead. It’s similar to what happened in late April, when markets reacted and retrenched after a limited rollout of results from a trial of Gilead Science›s Inc.›s virus treatment remdesivir. It was enough to get the drug approved on a limited basis, but doctors and investors alike are still waiting for something more than a basic analysis weeks later.
This boom-confusion-bust cycle doesn’t benefit anybody, except for companies such as Moderna that raise money at hyped-up valuations. Unsophisticated investors aren’t going to understand the nuances of drug development overnight. All this suggests that when it comes to a race for a vaccine with unprecedented scientific, public health, and policy implications, there ought to be a higher standard on disclosure.
Pharmaceutical companies routinely release so-called “topline” data, an initially limited snapshot of results in a press release, and then follow up with more detailed information at a later date. It’s also not at all uncommon to report interim results from incomplete ongoing studies. Even by that standard, Moderna’s release has issues. The company’s phase one trial was primarily intended as a first look at the vaccine’s safety rather than a hard test of whether it works. While the safety disclosures didn’t produce big red flags, they also weren’t flawless or especially detailed, especially considering that the company’s technology has never produced a widely used human vaccine.
Though it wasn’t the focus of the trial, efficacy data got the highest billing in the company’s press release and the most attention as the world grasps for hope about a quicker route back to normalcy. One of the principal sources of excitement — the claim that the vaccine created neutralizing antibodies equivalent to those in recovered individuals in a subset of patients — came from a group of just eight people. Even though scientists are still in the earliest stages of figuring out the immune response to this virus, Moderna provided no hard data on the level of antibodies produced or the yardstick it was measuring against. The world will have to wait for an indeterminate period for that information, and to see whether it translates to a protective effect in the real world.
It’s possible that Moderna had a predetermined plan to release results and followed it. Companies have to disclose material information, and there are more gray areas with this sort of early open-label trial. However, to the extent that there was latitude, investors and the world would arguably have been better served had the company waited a few weeks to get more follow-up data and released far more detail. The company created the conditions for a narrative to run ahead of the data, and other vaccine developers should avoid its example.
None of this is to say that the results are bad; they’re enough to proceed to and help inform larger trials. They’re just shaky justification for a huge rally in Moderna’s already elevated stock given the more difficult trials ahead for the vaccine, its uncertain commercial prospects, and the many other candidates in development, let alone for a broader surge. The release confirms that this vaccine is a viable candidate in a long race, not that one is coming dramatically sooner.
The enormous import of the ongoing work from Moderna and other companies and the public funds flowing in their direction should come with extra responsibility. Max Nisen, Boomberg
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