Single-day surge of 177%! Moderna (MRNA.US) cancer vaccine trial successful, wiping out short sellers, who lost $5.5 billion.

Moderna (MRNA.US) stock price soared to a record high, delivering a heavy blow of $5.5 billion to short-sellers betting that the vaccine producer's years of decline would continue. Moderna's stock surged 177% on Wednesday after its personalized cancer vaccine, developed in collaboration with Merck & Co., Inc. (MRK.US), helped reduce recurrence rates in late-stage melanoma trials. According to data from S3 Partners LLC, this leap resulted in approximately $5.5 billion in paper losses for short-sellers, increasing their year-to-date losses to about $7.7 billion based on market capitalization. Melanoma is the most severe type of skin cancer. According to the American Cancer Society, around 112,000 people in the U.S. are diagnosed each year, with about 8,500 fatalities. The two companies stated in a release that they will discuss submitting a listing application to regulators and will announce relevant data at an upcoming medical conference. Moderna CEO Stphane Bancel stated in an interview that the product could potentially be approved for market by 2027, contingent on regulatory review outcomes. Matthew Unterman, Managing Director at S3 Partners, remarked, "This has been an extraordinarily painful trend for Moderna's short-sellers," adding, "Today's market fundamentally changes the risk-reward ratio for anyone holding bearish positions." Short-sellers of Moderna suffered a loss of $5.5 billion due to the melanoma trial results. Even before the results of the melanoma trial were announced, Moderna's stock price had already climbed 114% this year, as investors flocked to the company, hoping its influenza vaccine could help diversify away from a shrinking COVID-19 vaccination business. With demand for COVID-19 vaccines decreasing, Moderna's stock price has fallen for four consecutive years, nearly 94% below its peak in 2021. Wall Street analysts praised the trial results as a significant potential boon for Moderna. Needham analyst Joseph Stringer called this melanoma research a "milestone victory" for Moderna, suggesting it could turn the company's oncology business into the next growth engine. Meanwhile, William Blair's Myles Minter raised his rating from "Market Perform" to "Outperform," telling investors that Moderna now has a clear outlook for diversifying its revenue away from COVID-19 business. The losses for short-sellers could have been even greater. According to S3 Partners, the short interest ratio for Moderna's shares (a measure of tradable shares) reached as high as 20% earlier this year and then fell to about 14% as traders covered some of their bearish bets. Unterman stated, "The reason todays impact is more profound is that short trades had already been closing outapproximately 20 million shares, or about a quarter of the outstanding positions, were covered this year. Such a magnitude of market volatility will force other short-sellers to reassess or reduce their positions."