INT Probability of Success Raised, but J.P. Morgan Believes Moderna Shares Have Overpriced the Positive Developments

Overview

This report updates the valuation of Moderna's INT pipeline. Following positive topline Phase II data in adjuvant melanoma, J.P. Morgan raised the probabilities of success for multiple indications and added risk-adjusted value for the potential in metastatic disease, increasing its price target from $40 to $77. However, the firm believes the market has already priced in higher expectations of success and therefore maintains its Underweight rating.

Core views

The report first updates its model based on positive topline Phase II data for INT in adjuvant melanoma and establishes a December 2027 price target of $77, replacing the previous December 2026 price target of $40. J.P. Morgan acknowledges that the data increase confidence in the program's probability of success, but it remains uncertain about the extent to which the results can be extrapolated to other tumor types and treatment settings and awaits the subsequent release of more comprehensive data details. In the adjuvant treatment setting, the report raises INT's risk-adjusted value. Moderna's economic interest in adjuvant melanoma is no longer risk-adjusted, whereas the previous model applied an 85% probability of success. The probability of success for Moderna's profit share in adjuvant lung, kidney, and bladder cancers is raised from 55% to 70%. This reflects the firm's increased confidence in the adjuvant melanoma data while retaining a cautious view on extrapolation across cancer types. For metastatic disease, J.P. Morgan believes uncertainty is greatest regarding whether the efficacy observed in adjuvant melanoma can be extrapolated. It therefore does not assign full value based on complete success, instead adding more heavily discounted risk-adjusted value. This component contributes approximately $12 per share, or about 15% of the new $77 price target. It is both an important source of the price target increase and an indication that the report does not yet view the metastatic setting as fully validated. For valuation, the report uses a DCF that incorporates forecasts for the commercial product portfolio together with pipeline value adjusted for probabilities of success. The WACC is lowered from 10.5% to 10.0%, while the terminal growth rate remains at 0%. Higher probabilities of success, newly added value for metastatic disease, and a lower discount rate collectively raise the price target from $40 to $77. Despite raising the price target, the report maintains an Underweight rating on Moderna. The reported share price on August 20, 2026, is $133.32, substantially above the $77 price target. The firm believes the strong share-price rally has already exceeded the de-risking value created by the INT data update. In its view, the market has priced in not only success in adjuvant melanoma but also excessively high expectations for other indications. The report lists absolute share-price performance of 491.3% year to date, 182.1% over one month, 281.4% over three months, and 524.8% over 12 months, with relative performance of 478.7%, 178.7%, 276.6%, and 504.6%, respectively. Financial forecasts continue to show the company operating at a loss and generating negative free cash flow. Revenue is expected to increase from $1.944 billion in FY2025 to $2.117 billion in FY2026, $2.174 billion in FY2027, and $2.457 billion in FY2028, corresponding to year-over-year growth rates of -39.9%, 8.9%, 2.7%, and 13.0%, respectively. Adjusted EBITDA is projected at -$3.074 billion, -$3.333 billion, -$1.829 billion, and -$1.393 billion, respectively; adjusted EPS at -$7.26, -$8.04, -$4.39, and -$3.35, respectively; and FCFF at -$2.065 billion, -$2.682 billion, -$1.411 billion, and -$1.101 billion, respectively. The model expects losses and cash burn to narrow from 2027 to 2028, but neither turns positive during the forecast period. The report notes that Moderna faces research and development, regulatory, commercialization, manufacturing, financing, and intellectual property risks common to the biotechnology industry. Factors that could create upside risk to the current cautious view include easing perceptions of high risk surrounding vaccine manufacturers or vaccination, greater-than-expected commercial opportunities for Moderna's products, faster-than-expected product approvals, and better-than-expected data from other INT trials and pipeline assets.

Analysis framework

J.P. Morgan first uses the topline Phase II results for INT in adjuvant melanoma as the catalyst to reassess the probabilities of success across different indications. It then separately adjusts the pipeline value for adjuvant treatment and metastatic disease, incorporates these values together with commercial product forecasts into a DCF, and lowers the WACC. Finally, the firm compares the resulting price target with the reported share price and recent gains, concluding that market pricing has already exceeded the de-risking value generated by the latest data.

Methodology notes

• Valuation MethodDiscounted Cash Flow (DCF)

  DCF Valuation

  The report discounts forecasts for the commercial product portfolio and the risk-adjusted pipeline value to present value, using a 10.0% WACC and a 0% terminal growth rate to derive a December 2027 price target of $77.

• (Out-of-Vocabulary Method)

  Pipeline Probability-of-Success Risk Adjustment

  The report assigns different probabilities of success to different indications based on clinical evidence: it removes the previous risk discount based on an 85% probability of success for adjuvant melanoma, raises the probability for adjuvant lung, kidney, and bladder cancers from 55% to 70%, and continues to apply a heavier risk discount to metastatic disease.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Moderna (MRNA.US)

  Positive INT data in adjuvant melanoma increase the risk-adjusted value of multiple oncology indications, but the firm believes the share price has already exceeded the de-risking value of these positive developments.

  Strengths

  Topline Phase II data for INT in adjuvant melanoma are positive, probabilities of success for adjuvant indications have been raised, and metastatic disease is also beginning to contribute to valuation.

  Weaknesses

  Adjusted EBITDA, adjusted EPS, and FCFF are all expected to remain negative from 2025 through 2028, while uncertainty persists regarding extrapolation of the data across cancer types and treatment settings.

  Comparison

  The reported share price of $133.32 is above the December 2027 price target of $77; the previous price target was $40.

  Risks

  The company faces research and development, regulatory, commercialization, manufacturing, financing, and intellectual property risks. Easing perceptions of vaccine risk, expanded commercial opportunities, faster approvals, or better-than-expected pipeline data could create upside risk to the Underweight view.

Key data

• Current Share Price$133.32As of August 20, 2026
• New Price Target$77.00Target date is December 2027
• Previous Price Target$40.00Previous target date was December 2026
• Treatment of Adjuvant Melanoma Probability of SuccessChanged from 85% to no longer being risk-discountedBased on positive topline Phase II INT data
• Probability of Success for Other Adjuvant Cancers70%Raised from 55% for adjuvant lung, kidney, and bladder cancers
• Valuation Contribution from Metastatic DiseaseApproximately $12/shareApproximately 15% of the new price target and still subject to substantial risk adjustment
• DCF WACC10.0%Previously 10.5%
• DCF Terminal Growth Rate0%Used in the price target valuation
• Absolute Share-Price PerformanceYear to date 491.3%; 1 month 182.1%; 3 months 281.4%; 12 months 524.8%The report uses this to emphasize the strong share-price rally
• Revenue Forecast2025A 1,944; 2026E 2,117; 2027E 2,174; 2028E 2,457In USD millions; year-over-year growth rates are -39.9%, 8.9%, 2.7%, and 13.0%, respectively
• Adjusted EBITDA2025A -3,074; 2026E -3,333; 2027E -1,829; 2028E -1,393In USD millions and remains negative throughout the forecast period
• Adjusted Earnings per Share2025A -$7.26; 2026E -$8.04; 2027E -$4.39; 2028E -$3.35Losses are expected to narrow after 2027 but remain negative
• FCFF2025A -2,065; 2026E -2,682; 2027E -1,411; 2028E -1,101In USD millions, with free cash flow remaining negative throughout the forecast period

Impact & implications

The INT data increase confidence in the pipeline valuation and significantly raise the price target through higher probabilities of success, newly added value for metastatic disease, and a lower WACC. However, the new price target remains below the reported share price, while financial forecasts indicate that Moderna will continue to face losses and negative FCFF through 2028. J.P. Morgan therefore believes the market has priced in excessive expectations for the success of INT and other pipeline assets.

Risks

• INT's efficacy in adjuvant melanoma may not be transferable to other tumor types or treatment settings, with particularly high uncertainty surrounding extrapolation to metastatic disease.
• Moderna faces research and development, regulatory, commercialization, manufacturing, financing, and intellectual property risks common to the biotechnology industry.
• If current perceptions of high risk surrounding vaccine manufacturers and vaccination ease, this could create upside risk to the report's cautious view.
• If the commercial opportunities for Moderna's products are greater than expected or product approvals occur faster than expected, actual value could exceed the report's estimate.
• If other INT trials or pipeline assets report better-than-expected data, this could weaken the Underweight view.

What to watch

• Monitor the full data details from the Phase II study of INT in adjuvant melanoma when they are subsequently released.
• Monitor whether the efficacy observed in adjuvant melanoma can be validated in other adjuvant treatment settings, including lung, kidney, and bladder cancers.
• Monitor evidence of INT's activity in metastatic disease and whether it supports reducing the current substantial risk discount.
• Monitor approval progress and commercial opportunities for Moderna's products, as well as data from other INT trials and pipeline assets.
• Monitor whether perceptions of risk surrounding vaccine manufacturers and vaccination ease.