What happened

Shares of Moderna (MRNA -0.34%) are surging today, up 12.7% as of 10:07 a.m. EDT. The nice gain came after the biotech announced on Tuesday the publication of results from a phase 1 study of COVID-19 vaccine candidate mRNA-1273 in The New England Journal of Medicine. The clinical study was led by the National Institute of Allergy and Infectious Diseases (NIAID).

Those results revealed that neutralizing antibodies (which can prevent infection by the novel coronavirus that causes COVID-19) were found in all 45 participants involved in the phase 1 study. Moderna's experimental vaccine also appeared to be generally safe and well tolerated.

Masked person wearing disposable gloves and holding a vaccine vial labeled COVID-19 VACCINE

Image source: Getty Images.

So what

Moderna announced positive preliminary results from the phase 1 study on May 18, 2020. However, the company didn't provide as many details in that announcement. The data published in The New England Journal of Medicine was even better than expected.

The primary objectives of a phase 1 clinical study are to evaluate a candidate's safety and determine the optimum dosing. Both objectives seem to have been readily met in this case.

Moderna's mRNA-1273 didn't produce any serious adverse events. The adverse events that did occur were generally mild to moderate in severity and were resolved relatively quickly. The study also showed that the 100-microgram dose of the vaccine candidate was the best dosage to use.

But the observation of neutralizing antibodies in all participants receiving mRNA-1273 really captured investors' attention. Even better, the levels of these neutralizing antibodies were much higher than levels seen in patients who recovered from COVID-19. This is an encouraging sign that could point to the potential for mRNA-1273 to be effective in preventing infection by the novel coronavirus.

Now what

Moderna is currently evaluating mRNA-1273 in its own phase 2 study. The next major catalyst for the biotech stock could come when results from this study are announced. The main thing to watch with Moderna, though, is the phase 3 study of mRNA-1273, which is scheduled to begin on July 27.