What happened

Shares of Moderna (NASDAQ:MRNA) were sliding 6.2% lower as of 11:41 a.m. EDT on Wednesday. Two factors appeared to be behind the biotech stock's decline. First, the FDA issued an update on Tuesday that could mean no COVID-19 vaccine will be approved until next year. Second, Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) announced positive results from a phase 1/2 study of COVID-19 vaccine candidate BNT162b1.

So what

Some investors had hoped that Moderna could potentially win FDA approval for its mRNA-1273 COVID-19 vaccine before the end of 2020. Those hopes appear distant now. The FDA's update on Tuesday underscored that the agency doesn't plan to relax its requirements for approval in any way because of the urgent need for a COVID-19 vaccine.

Female scientist holding COVID-19 vaccine bottle

Image source: Getty Images.

However, it's not surprising in the least that the FDA intends to follow its standard process for approving vaccines. FDA Commissioner Stephen Hahn stated, "We have not lost sight of our responsibility to the American people to maintain our regulatory independence and ensure our decisions related to all medical products, including COVID-19 vaccines, are based on science and the available data."

The positive results announced today by Pfizer and BioNTech highlighted the fact that Moderna doesn't have the only messenger RNA (mRNA) vaccine in the COVID-19 race. Pfizer and BioNTech reported that BNT162b1, one of four experimental COVID-19 vaccines being evaluated in a phase 1/2 study, produced neutralizing antibodies (which prevent infection by the novel coronavirus) in all patients seven days after the second dose of the vaccine. 

Good news for a potential rival doesn't necessarily translate to bad news for Moderna. However, investors might be a little worried that Pfizer and BioNTech could have a more effective mRNA vaccine for COVID-19 than Moderna does.

Now what

Moderna hopes to begin a phase 3 study of its COVID-19 vaccine this month. There are likely to be plenty of ups and downs for the biotech stock as the race to develop safe and effective COVID-19 vaccines heats up.