Even after Merck reported successful trials of its melanoma (skin cancer) vaccine developed in partnership with Moderna, TD Cowen has placed a ‘Hold' rating on the stock.
While shares of both companies soared significantly on the melanoma vaccine trial development, the investment banking firm struck a cautious note on Merck shares at a target price of $137, marking a downside of nearly 10% from its Wednesday closing price of $152.2.
According to TD Cowen, the success of vaccine trial was expected, although its overall potential remains unclear at present.
“Success is not unduly surprising given strong Phase II data,” CNBC quoted TD Cowen's note . “Positive results serve as validation ... but breadth of potential still unknown," it added. The firm's outlook comes despite Merck shares climbed more than 12% following the development.
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On Wednesday, Moderna and Merck shares soared as much as 177% and 12% respectively after investors stayed bullish on successful trial for Melanoma vaccine.
According to Moderna, the latest results were the first positive outcome observed in a large-stage trial for an mRNA cancer vaccine. Moderna's vaccine injection coupled with Merck's immunotherapy Keytruda achieved the intended objective in Phase-3 of the trial with over 1,100 patients with higher-risk or advanced melanoma having their detected cancer entirely removed via surgery.
Merck shares remained in red during the trading session falling as much as 2.4% to $148.52. Meanwhile, Moderna witnessed sharp correction today, with the stock tumbling as much as 20.4%.
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