(Bloomberg) -- Merck & Co. said it sold its stake in Moderna Inc., the biotechnology company that's in the midst of developing a Covid-19 vaccine. The shares of both companies rose.
Merck sold its direct equity investment in Moderna during the first half of the fourth quarter, according to a statement from the U.S. drugmaker on Wednesday. No terms of the sale of the holdings were given.
Shares of Moderna fell by as much as 9% as the U.S. market opened, but the stock recovered quickly and was up $2.5% to $144.50 at 10:05 a.m. in New York trading. The company's stock has seen a more-than-sevenfold surge so far this year. Merck's shares were up 0.42% to $81.90.
Based in Cambridge, Massachusetts, Moderna is developing one of the fastest-moving potential coronavirus vaccines. The shot is slated for review by U.S. regulators in the coming weeks.
Merck, which is also developing its own Covid-19 vaccines, was an early investor in Moderna, investing $50 million in 2015 and another $125 million in 2018. Moderna sold shares to the public for the first time in Dec. 2018. The U.S. drug giant said it had seen a large increase in the value of its investment since it first put money into the company.
“Merck achieved a substantial gain on its direct holding in MRNA over the life of the investment, particularly in 2020 given the substantial appreciation in MRNA's stock price,” the drugmaker said in its statement. A spokeswoman declined to provide additional details.
Merck still holds an indirect exposure to Moderna through its investment in venture funds, the company said, and the drugmakers are working together on developing new cancer therapies.
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