A medical website appeared to post the numbers two days early. The numbers were good. Moderna (MRNA) fell 17.5% anyway. That's what happens to a stock priced for perfect. It also says something about healthcare stocks right now, and Thursday's Heard on the Street column said it first.
Moderna and its partner Merck (MRK) are testing an mRNA vaccine for melanoma, a serious skin cancer. Full results were due Saturday, Oct. 24, at the European Society for Medical Oncology meeting. On Thursday, screenshots on X suggested a site called OncologyCentral had posted some of them. The society said its no-publish agreement had been broken. "We fully recognize the seriousness of the situation and the potential consequences," a spokeswoman said. Moderna, Merck and the society then released the data that day. Xavier Martinez and Lizzy Lawrence have the story in Friday's Journal.
The vaccine cut the risk of the cancer spreading by 38% against standard treatment in high-risk patients. Analysts called that largely positive. The trouble was the setup. In August, Moderna said the vaccine kept melanoma from coming back or spreading, and the shares more than doubled. They rose another 40% through Wednesday on hope for the details. TD Cowen analyst Tyler Van Buren wrote that 38% was favorable but short of expectations. Moderna closed at $202.63, down $43.18. Merck fell 1.8%. A fund that bets double on Moderna, ticker MRNX, lost 34.8% in one day.
Safety now costs extra
That brings us to the bigger story. David Wainer wrote in Thursday's Heard on the Street that healthcare stocks no longer trade at a discount. A year ago the sector cost 25% less than the S&P 500 per dollar of expected profit. Now the XLV healthcare fund costs 19.3 times its expected profit for the next year, slightly above the market, by FactSet's count. Investors worried about AI spending have been buying steady earners. On Tuesday, Oct. 20, the XLV rose more than 2%, led by Moderna's 6.7% jump. Wainer says the premium alone isn't a reason to sell. In early 2006, he notes, investors who ran to healthcare lagged for nearly two years. Then the financial crisis hit, the sector held up far better, and it led for a decade. Thursday, Oct. 22, fit the pattern. The XLV rose 1.32% while the Nasdaq fell 2.6%. Moderna was the exception.
Our read
This is an Investments/Risk IN04 story, and it teaches two things. First, a good result can sink a stock priced for a great one. Moderna doubled on a headline in August and gave back 17.5% on the details. Second, safety has a price now. Healthcare at a premium is insurance, and insurance costs money. It can lag for a year or two while a boom runs. We hold the sector at weight. Eli Lilly (LLY) is in 23 books, Johnson & Johnson (JNJ) in 25 and AbbVie (ABBV) in 23. Merck is in 11 and UnitedHealth (UNH) in 9. Nothing added. Moderna is in no book. Our verdict is hold.
Here's the connection to your own money. Find the stock in your account that jumped the most on a headline this year. It might be a biotech or an AI name. Open the app this week and see what share of the whole it has become. If it grew from a small slice to a tenth of your retirement savings, your plan changed without asking you. A common rule of thumb keeps any single stock to a small slice, and Moderna's 17.5% day shows why. If that share surprises you, bring the number to a review.