Here’s why Daiichi Sankyo shares are rallying today

Daiichi Sankyo's stock experienced a significant surge of 6.1% on Thursday, reaching ¥2,895, following an overnight rally in its global drug development partner, Merck. On the following trading day, Merck saw a remarkable 12% increase in after-hours trading. This surge was accompanied by a 100% rise in Moderna's shares, which developed a novel, personalized melanoma cancer vaccine.

The collaboration between Merck and Moderna was disclosed on Wednesday, and it marked the first late-stage trial of their experimental vaccine, yielding positive results. The partnership between the two companies is a crucial one, as they signed a $4 billion deal in late 2023 to jointly develop oncology treatments. Merck's involvement in the trial benefited Daiichi Sankyo, even though the Japanese company has no direct role in the development.

Daiichi Sankyo is among Japan's leading oncology developers and tends to follow the broader industry trends. The company's stock contributed to a 0.8% rise in the Nikkei 225 index on Thursday. Takeda Pharma, which has several partnerships with Moderna, also experienced a 1% increase in its share price.