What happened

Moderna (NASDAQ:MRNA) announced the publication of positive results from a phase 1 study of its COVID-19 vaccine candidate mRNA-1273 late Tuesday. But those results led to the stocks of several other drugmakers working on experimental vaccines against the novel coronavirus that causes COVID-19 to drop. 

Shares of BioNTech (NASDAQ:BNTX) and Inovio (NASDAQ:INO) were down 5.4% and 6.1%, respectively, as of 3:35 p.m. EDT on Wednesday. IMV (NASDAQ:IMV) stock was down 6.9%. Altimmune (NASDAQ:ALT) and Sorrento Therapeutics (NASDAQ:SRNE) were hit even harder, with their shares sinking 9.3% and 17.3%, respectively.

Not every stock of drugmakers developing COVID-19 vaccine candidates fell today, though. AstraZeneca shares jumped 7.6% in anticipation of the impending announcement of phase 1 results for its coronavirus vaccine candidate. Novavax stock was also up 1.2%.

Gloved hands holding bottles that say "coronavirus vaccine"

Image source: Getty Images.

So what

Investors seem to be treating the race to develop a COVID-19 vaccine as a zero-sum game, to some extent. But it isn't. The success of one vaccine candidate doesn't necessarily diminish the prospects for other candidates -- especially for companies that aren't too far behind in development.

For example, Moderna's positive results could be viewed in a positive light for BioNTech. Like Moderna, the German biotech, in partnership with Pfizer, is developing a COVID-19 vaccine candidate using a messenger RNA (mRNA) approach. 

It makes more sense why Inovio's luster might have dimmed somewhat in investors' eyes after Moderna's update, though. While Moderna reported that all of the participants receiving mRNA-1273 in the phase 1 study had neutralizing antibodies that could prevent infection by the novel coronavirus, Inovio didn't provide details about the production of neutralizing antibodies in the preliminary phase 1 results for its COVID-19 vaccine candidate INO-4800.

However, Moderna's positive results underscored just how far behind other small biotechs are that haven't advanced COVID-19 vaccine candidates into clinical testing yet. That's probably why Altimmune, IMV, and Sorrento shares slid more than the other stocks did.

Now what

You can kind of view the development of COVID-19 vaccine candidates as a horse race. Anyone who bets on a horse that pulls ahead during the race will get excited, while those who bet on other horses could begin to worry. However, this is a race that could have multiple winners. And the race isn't over yet. In the meantime, all of these biotech stocks could be highly volatile.