Merck Sells Equity Stake in Moderna Following Record Gains For Coronavirus Vaccine Maker

Merck & Co, an early investor in coronavirus vaccine maker Moderna, has sold its equity stake following a record year of gains for the Cambridge, Massachusetts-based biotech.
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Merck & Co.  (MRK) - Get Report dumped its equity stake in Moderna  (MRNA) - Get Report, the drugmaker said Wednesday, following a year-to-date gain of more than 620% for the breakthrough coronavirus vaccine developer.

Merck, which invested around $125 billion into Moderna in 2018 through a so-called preferred equity stake, exited the holding in the first half of the fourth quarter and will record a modest bottom-line gain as a result. 

"Merck achieved a substantial gain on its direct holding in Moderna over the life of the investment, particularly in 2020 given the substantial appreciation in Moderna's stock price," the company said in a statement. Merck retains exposure to Moderna indirectly through its investment in venture funds."

"Merck and Moderna continue to collaborate on the development of personalized cancer vaccines as well as a cancer vaccine that encodes the four most common KRAS mutations," the statement added.

Merck shares were marked 0.9% higher in pre-market trading following news of the divestiture, indicating an opening bell price of $82.30 each.

Moderna shares, meanwhile, pared earlier pre-market gains to slip 4.55% lower, indicating an opening bell price of $132.60 each.

Moderna shares have added more than $50 billion in value since accelerating its coronavirus vaccine development in late March with help from the U.S. Biomedical Advanced Research and Development Authority, and traded at an all-time high of $178.50 each over the Tuesday session.

Moderna said its vaccine hit an overall efficacy rate of 94.1% efficacy rate, nearing the 95% threshold reported by Pfizer  (PFE) - Get Report and BioNTech  (BNTX) - Get Report last week, and noted that it can last for up to six months when stored at standard freezer temperatures of -4 degrees Fahrenheit, compared to the -94 degree temperatures required for the Pfizer vaccine.

Contracts with the U.S. government, as part of Operation Warp Speed, as well as those signed with Britain and the European Union, provided an early revenue boost for the Cambridge, Massachusetts-based biotech, while extended orders into 2021 and beyond could boost its topline to around $4.5 billion, analysts have estimated.

Modena said it could have 20 million doses available for the U.S. market this year, as well as a total supply of between 500 million and 1 billion doses worldwide next year.