Moderna and Merck's personalized cancer vaccines have added over $50 billion in market value to the two drugmakers. The diagnostic sequencing process behind these vaccines is emerging as a new investment opportunity. Tempus AI, as a sequencing partner for the Moderna-Merck vaccine, could benefit if the vaccine is approved. Piper Sandler estimates the melanoma vaccine alone could generate at least $50 million in annual sequencing revenue, while BTIG analyst Mark Massaro projects the figure could exceed $600 million. The post-treatment cancer recurrence monitoring market via blood tests is seen as a multi-billion-dollar opportunity, but Natera currently dominates. However, uncertainties remain in the mRNA cancer vaccine field, and pharma companies may internalize some sequencing work in the future.
Personalized cancer vaccines from Moderna and Merck have tacked on more than $50 billion in market value for the two drugmakers. Now the diagnostic sequencing work behind those shots is catching investor interest. A fresh opening, they think.
These vaccines depend on gene sequencing to spot mutations unique to each patient. Analysts view that as a recurring revenue stream for diagnostic firms. Tempus AI, which works as a sequencing partner on the Moderna-Merck vaccine, stands to gain if the vaccine wins approval.
Piper Sandler says the melanoma vaccine by itself could bring in at least $50 million a year in sequencing revenue. BTIG analyst Mark Massaro thinks that number could top $600 million.
And it is not just the sequencing done before treatment. The market for tracking cancer recurrence after treatment through blood tests is widely seen as a multi-billion-dollar opening. But Natera owns that space right now.
Still, the mRNA cancer vaccine business comes with real uncertainty. Drugmakers could decide to pull some sequencing work inside their own walls over time. If that happens, growth for outside partners such as Tempus AI could get capped.
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