Moderna is a biotechnology company that develops medicines and vaccines. The company became widely known during the COVID-19 pandemic after developing one of the first vaccines against the virus. That success created an unusual management challenge. Moderna’s COVID-19 vaccine generated tens of billions of dollars in sales, but when demand for the shots declined, so did the company’s fortunes. 

Moderna needed to show investors that its core technology, messenger RNA, or mRNA, could produce successful products beyond its COVID-19 vaccine. Its leaders had already placed a major bet on another possibility: cancer. In August 2026, Moderna and Merck announced that their personalized mRNA cancer vaccine, used in combination with Merck’s cancer drug Keytruda, had succeeded in a late-stage clinical trial involving patients with melanoma, a serious form of skin cancer. It was the first mRNA cancer vaccine to succeed in a large-scale study. The breakthrough illustrates one of management’s most difficult responsibilities: making decisions today when the results may not be known for years.

A Big Bet Before the Big Break

Moderna was founded in 2010 around the idea that mRNA could instruct the body’s cells to produce proteins that might help prevent or treat disease. When Stéphane Bancel became CEO in 2011, however, cancer was not initially one of his priorities. The young company had limited resources, and management focused on areas where executives believed mRNA had a greater chance of succeeding.

That began to change in 2013. Stephen Hoge, who led Moderna’s drug-development efforts, became interested in research suggesting that mRNA could be used against cancer. Bancel saw the potential but also saw the financial problem. Moderna had fewer than 100 employees and could not afford another large research program. An unexpected $500,000 gift from early investor Patrick Degorce allowed Moderna to hire two cancer scientists and begin exploring the idea. 

But starting a program was much easier than turning it into a viable treatment. Cancer vaccines had a poor track record. Researchers had attempted to develop therapeutic cancer vaccines many times, generally without meaningful success in clinical trials. Moderna also faced a production challenge. A personalized vaccine would have to be created for an individual patient, raising questions about whether it could ever be manufactured at an economically reasonable cost. 

Management therefore had to consider whether the company could afford the research, whether a treatment could eventually be produced efficiently, and whether the potential benefits justified years of uncertainty. Those questions turned the scientific opportunity into a management decision about how to allocate limited resources under uncertainty.

Sharing the Risk

By 2016, Moderna had determined that it needed a partner. Bancel and Hoge approached Merck, which already sold Keytruda, an important cancer immunotherapy. Merck agreed to pay Moderna $200 million to fund research examining whether Moderna’s cancer vaccine could work with Keytruda. The arrangement gave Moderna access to resources and expertise it could not easily provide on its own while allowing Merck to explore a promising technology without developing it entirely from scratch. In 2022, Merck committed to jointly develop the vaccine and share potential profits.

The partnership demonstrates how managers can respond when an opportunity is larger than the resources available inside their own organization. Instead of abandoning the project or attempting to bear all of the financial and scientific risk itself, Moderna shared those risks with another company. 

Managing through the COVID-19 Roller Coaster

While the cancer research continued, the 2020 pandemic hit. Moderna quickly developed an mRNA vaccine against the virus and received more than $1 billion in government funding to accelerate development. Its COVID-19 vaccine generated roughly $36 billion in sales during its first two years. 

Some of that cash helped finance Moderna’s continuing cancer research, but the success did not last forever. As demand for COVID-19 vaccines fell, sales dropped sharply, investors became increasingly pessimistic, and political opposition to mRNA technology added another layer of uncertainty. Moderna responded by reducing costs and narrowing its priorities. The company cut jobs and ended or shelved several research programs. In 2025, it laid off more than 800 workers, or about one-tenth of its workforce. The federal government also canceled more than $700 million in Moderna contracts related to developing a vaccine against bird flu. At the same time, Moderna continued trying to diversify, winning approvals for vaccines against respiratory syncytial virus and flu and investigating treatments for rare diseases.

Managers therefore faced a classic resource-allocation problem. They could not fund every promising idea indefinitely. They had to decide which programs to continue, which to eliminate, and where limited money and employee effort had the greatest chance of producing future value. Cancer remained a priority.

When a Long-Term Decision Finally Delivers

When Moderna and Merck announced the successful late-stage melanoma results in August 2026, the news immediately changed investors’ expectations about Moderna. Before the news, its stock had fallen nearly 90 percent from its pandemic-era peak. After the announcement, shares increased 177 percent in a single trading day.

The response shows why management decisions often have consequences long before or long after revenue actually appears. Moderna still does not have an approved cancer vaccine to sell, and much remains unknown about the treatment’s benefits and long-term effects. Moderna and Merck must obtain government approval and determine how to manufacture and price a personalized treatment. Whether it eventually becomes a major commercial success remains unknown.

Moderna and Merck are studying the approach in other cancers, including lung and kidney cancer. Other companies are developing their own mRNA cancer vaccines as well. Analysts expect the successful melanoma trial to encourage additional investment in the field.

In the Classroom

This article can be used to discuss management and decision making (Chapter 6: The Nature of Management), including how managers allocate limited resources, evaluate risk, develop partnerships, adjust plans as conditions change, and balance short-term financial pressures with long-term organizational objectives.

Discussion Questions

  1. Why did Moderna initially decide not to pursue cancer research even though executives saw potential uses for mRNA in cancer treatment?

  2. Why did Moderna decide to partner with Merck rather than develop the personalized cancer vaccine on its own? 

  3. What actions did Moderna take as COVID-19 vaccine sales declined and financial pressures increased?

This article was developed with the support of Kelsey Reddick for and under the direction of O.C. Ferrell, Linda Ferrell, and Geoff Hirt.