Why Moderna and Novavax shares are higher today

What happened

Actions of COVID-19 vaccine developers Modern (NASDAQ: ARNM) and Novavax (NASDAQ: NVAX) both walk higher today. In response to the news that AstraZeneca (NASDAQ: AZN) and its partner Oxford University will likely need to conduct another late-stage trial for their COVID-19 vaccine candidate in order to gain regulatory approval in the United States, Moderna’s stock was up 11.4%, while Novavax was 11.8% higher as of 9:49 a.m. EST Friday morning.

So what

A few months ago, AstraZeneca and the COVID-19 vaccine from Oxford appeared to be on track to become one of the first products on the market. However, after the discovery of a major dosing error in its advanced stage trial, this once promising vaccine now looks destined to become a second or perhaps third level product.

This opens the door wide, from a business point of view, for small companies like Moderna and Novavax. Moderna’s messenger RNA (mRNA) vaccine has already shown exceptional results in its advanced stage trial. The company, in turn, is expected to seek emergency use authorization from the Food and Drug Administration in the coming days.

Novavax, on the other hand, lags slightly behind the pack with its more traditional protein-based vaccine, but it may also enjoy key logistical advantages over the current leaders of Moderna and Pfizer. Novavax, in fact, now has a high chance of securing the third U.S. approval for a COVID-19 vaccine following Astra’s clinical error.

Now what

The simple reason investors are bidding on Moderna and Novavax shares today is because Astra’s setback could translate into hundreds of millions (or even billions) in additional sales for their vaccine candidates. That’s a solid rationale for these double-digit moves, of course.

In the longer term, however, these innovative biotechnologies may have even more leeway. Moderna has a very diverse portfolio of high value mRNA vaccines and therapeutic products; while Novavax could easily evolve into a two-product company (COVID-19 and influenza vaccines, respectively) before the end of 2021. So if you missed today’s moves, it might still be worth it. seize shares of the two biotechnologies.