What happened

Shares of the vaccine developers Inovio Pharmaceuticals (NASDAQ:INO), Moderna (NASDAQ:MRNA), and Novavax (NASDAQ:NVAX) are all up big yet again today. In pre-market action, Inovio's stock rose by as much as 16.5%, Moderna's shares spiked as high as 25%, and Novavax's equity gained a stately 26.9%. All three biotechs are jumping in response to the rapid spread of the COVID-19 illness across the globe. In addition, shares of the biotech heavyweight Gilead Sciences (NASDAQ:GILD) rose by a healthy 7.2% on the heels of this emerging public health threat as well.  

So what

As vaccine developers, Inovio, Moderna, and Novavax might all come to play a critical role in the battle against this respiratory ailment. Inovio is in the midst of planning an early-stage trial for its anti-COVID-19 vaccine candidate, dubbed INO-4800.

Moderna recently announced that it has shipped the first batch of its experimental COVID-19 vaccine, known as mRNA-1273, to U.S. governmental researchers at the National Institute of Allergy and Infectious Diseases. An early-stage trial for the vaccine is slated to kick off this April.

A woman's hand appearing to resist the coronavirus.

Image Source: Getty Images.

Novavax stated yesterday that it is assessing "multiple nanoparticle vaccine candidates to identifying an optimal candidate for human testing." The company hopes to have a vaccine in the clinic by the end of spring.

Gilead, for its part, announced yesterday evening that it is close to launching a pair of late-stage trials to investigate the experimental antiviral drug remdesivir as a treatment for patients already infected with the virus. The company expects to begin enrollment in these twin trials early March. The initial wave of top-line results from these trials might be ready for public consumption as soon as late April. 

Now what

Are these noteworthy moves higher Thursday morning justified? From a purely commercial standpoint, the answer is most likely not. That said, Inovio, Moderna, and Novavax might be in line for some rather large grants in the near future. The U.S. government, after all, is reportedly earmarking at least $1 billion for a COVID-19 vaccine program, and this figure could grow much higher, with some key Democrats calling for upward of $15 billion in emergency funds to address the outbreak. Inovio and Novavax both have market caps of right around $400 million, so a large grant would definitely be a market-moving event for these tiny clinical-stage biotech companies.

On the flip side, the much larger Gilead and Moderna would both need to see a healthy bump in annual revenue from their respective COVID-19 related products to justify the sustained rally in their shares this month. Underscoring this point, Moderna's shares have now gained a staggering 72% (when factoring in today's pre-market move) in the month of February, whereas Gilead's shares are on track to rise by an eye-popping 20% if today's early-morning move holds. Long story short, the market is almost certainly getting way ahead of itself with these kinds of gains. The bottom line is that neither of these bigger biotechs have much of a chance of benefiting financially in a major way from an anti-COVID-19 product.