Because Moderna and Novavax shares are running higher today

What happened

Actions of the developers of the COVID-19 vaccine Modern (NASDAQ: MRNA) is Novavax (NASDAQ: NVAX) they are both marching higher today. In response to the news that AstraZeneca (NASDAQ: AZN) and Oxford University partner will likely have to perform another late-stage study for their COVID-19 vaccine candidate in order to gain regulatory approval in the U.S., Moderna’s stock was up a healthy 11.4% , while Novavax was 11.8% higher as of 9:49 am EST Friday morning.

So

A few months ago, AstraZeneca and Oxford’s COVID-19 vaccine appeared to be on track to become one of the first products to market. After the discovery of a major dosing error in its late-stage trial, however, this once promising vaccine now looks set to become a second or possibly third tier product.

Image source: Getty Images.

This opens the doors in a big way, from a commercial point of view, to smaller companies such as Moderna and Novavax. Moderna’s messenger RNA (mRNA) vaccine has already published outstanding results in its late-stage study. The company, in turn, is expected to apply for an emergency use permit from the Food and Drug Administration within the next few days.

Novavax, on the other hand, is slightly behind with its more traditional protein-based vaccine, but may also enjoy some key logistical advantages over the current Moderna and front-runners. Pfizer. Indeed, Novavax now has a strong chance of gaining third U.S. approval for a COVID-19 vaccine following Astra’s clinical blunder.

Now what

The simple reason that investors are offering shares in Moderna and Novavax today is that Astra’s setback could translate into hundreds of millions (if not billions) of additional sales for their vaccine candidates. This is solid rationale for these double-digit moves to be sure.

In the long run, however, these innovative biotechnologies may have even more room to function. Moderna has a highly diverse pipeline of high-value mRNA vaccines and therapies; whereas Novavax could easily evolve into a two-product society (COVID-19 and flu vaccines, respectively) before the end of 2021. So, if you’ve missed today’s moves, it might still be worth grabbing a few actions from both biotechnologies.