Personalized cancer vaccines from Moderna and Merck have added more than $50 billion in combined market value for the two drugmakers. That momentum is opening a less obvious investing lane in the diagnostics work behind every dose.
The vaccines depend on genetic sequencing to identify the mutations each patient’s immune system should target. That step may be emerging as its own investable opportunity, separate from the vaccines themselves.
A Recurring Business, Not a One-Time Sale
Every personalized cancer vaccine requires a tumor to be sequenced first. Analysts view that step as a recurring, per-patient revenue stream. It is not a one-time service tied to a single drug launch.
One of the diagnostics companies positioned to benefit is Tempus AI, a genomic-sequencing firm. Tempus has said it will serve as the sequencing partner if the Moderna-Merck vaccine wins regulatory approval.
Moderna’s own shares have also benefited from investor enthusiasm for its wider drug pipeline, part of a pipeline-driven stock rally that predates the vaccine news.
Piper Sandler estimates the melanoma vaccine could generate at least $50 million in annual sequencing revenue, if regulators approve it. BTIG analyst Mark Massaro projects that figure could exceed $600 million.
That estimate assumes expansion into lung, bladder, and kidney cancers. Therefore, Massaro said, that opportunity is barely reflected in Tempus AI’s stock today.
The Bigger Prize May Come After Treatment
However, the larger opportunity may not be the upfront sequencing fee. After treatment, doctors still need to monitor patients for cancer recurrence. That monitoring often relies on a blood test called minimal residual disease (MRD) testing, which searches for trace tumor DNA.
Bioaxia CEO Douglas Eby, whose firm holds both Tempus and Personalis shares, sees the sequencing step as a customer-acquisition funnel. He said sequencing brings patients into Tempus’s ecosystem, while MRD testing could bring them back for years of monitoring.
Investors view MRD testing as a multibillion-dollar opportunity. Meanwhile, Natera currently controls most of that market, with a valuation near $45 billion.
The mRNA cancer-vaccine space remains unproven. Just weeks after Moderna’s positive trial results, rival BioNTech suffered a setback in a mid-stage colorectal cancer vaccine trial. That reversal shows how quickly sentiment can shift in this sector.
Pharmaceutical companies could also eventually handle some sequencing in-house. They could also split the work among competing diagnostic labs, leaving diagnostics firms with a smaller share of the business than investors currently expect.
Source: BeInCrypto
