Moderna shares get a shot in the arm after cancer vaccine results

**Luke Wilson** (0:01)
US borrowing costs keep climbing despite the government stepping in. It's World Business Express from the BBC World Service. I'm Luke Wilson. Trial success for a new cancer vaccine gives Moderna a shot in the arm. And the founder of the Chinese property giant Evergrande is jailed for life over its collapse.
US national debt has more than doubled in a decade to reach a landmark $40 trillion. And in the last few hours, borrowing costs for the world's biggest economy have started rising again. Nicholas Hyatt is lead alternatives analyst at Hargreaves Lansdowne. And Nicholas, the Treasury trying to slow this down by saying it will buy more government debts. Is that working?

**Nicholas Hyatt** (0:48)
At the margins, these sorts of things do make a difference. But the fundamental cause of higher borrowing costs is rising government debt and worries about whether that burden is sustainable in the long run. The Treasury's interventions don't really address that and don't solve it. So those worries will continue. And if interest rates continue to rise further, you end up in a vicious circle.
Those higher interest rates do have like real world knock on effects for the market.
Broadly speaking, US government debt is the global risk free rate. So any amount that you get paid to lend to the US, you want more to lend to higher risk things, whether that's a country, a company or a person. So if interest rates for the US government rise, interest rates for everyone else tend to rise as well. That has complex knock on effects both for company profits but also for the value of things like shares and property. So it really does matter to the whole market.

**Luke Wilson** (1:40)
Nicholas Hyatt from Hargreaves Lansdowne, thank you.
Shares in the pharmaceutical maker Moderna jumped 177% in a single day after a vaccine it's developed with the drug company Merck stopped skin cancer returning in patients. It uses mRNA technology which was used for some COVID-19 vaccines by surgically removing a small part of a tumour and sequencing its DNA. Georgina Long from the Melanoma Institute Australia is a principal investigator on the late stage trial.

**Georgina Long** (2:10)
This is the first ever evidence for mRNA technology in cancer that it can work. This is a vaccine that's given when someone actually has the disease and it worked.
It is a landmark moment in cancer.

**Luke Wilson** (2:27)
Moderna's share price has pared back slightly this afternoon but is still 120% higher than Tuesday's close. Louisa Hector is head of Global Pharma Equity Research at the German bank Berenberg.

**Louisa Hector** (2:39)
Over the years since the COVID vaccine, investors have struggled to appreciate value within Moderna. So the share price has been unwinding to kind of reflect that level of concern that actually we're not unlocking value here for patients and for shareholders.
And so this is a big moment. A phase three success is a big unlock of value. And we'll see that data in more detail. But at the moment, that headline announcement is super positive. So you're unlocking value for the future, which just wasn't reflected in the Moderna share price. And that value applies to skin cancer. But we know there are many trials behind this lung cancer, kidney cancer. So we can now be more confident in some success in other areas in oncology.

**Luke Wilson** (3:27)
And this is a co-venture with the US drug maker Merck. Is a company like Merck, for example, seeing a bigger market capitalization as off the back of this?

**Louisa Hector** (3:37)
Yes. So Merck shares this product. It's essentially a 50-50 profit share. Now Merck is a very different company, right? It's very mature. It has many different products. And it is actually a leader in this area of skin cancer. This is why Moderna partnered with Merck.
So a different share price reaction, nevertheless positive that the shares were up 11% yesterday.

**Luke Wilson** (4:00)
Louisa Hector from Berenberg. The founder of the failed Chinese property firm Evergrande has been sentenced to life in jail. Hui Ka Yang had previously admitted charges including embezzlement and corporate bribery. He oversaw the rapid expansion of Evergrande into China's biggest real estate firm before it collapsed, owing hundreds of billions of dollars. I asked the BBC's Martin Yip in Hong Kong if this life sentence draws a line under the saga.

**Martin Yip** (4:27)
So with that and the very big fight to the two companies in both Evergrande and Evergrande property, a total of 2.35 billion US dollars is almost the end of the story of Evergrande as a company.

**Luke Wilson** (4:40)
Five years on since the Evergrande collapse, what is the legacy on the housing market on the Chinese economy generally as well?