What happened

Coronavirus-related stocks declined sharply on Wednesday, extending their losses following Russia's announcement on Tuesday that it had developed the world's first COVID-19 vaccine. 

As of 11:55 a.m. EDT, shares of Novavax (NASDAQ:NVAX), Heat Biologics (NASDAQ:HTBX), Sorrento Therapeutics (NASDAQ:SRNE), Vaxart (NASDAQ:VXRT), and iBio (NYSEMKT:IBIO) were down 20%, 17%, 15%, 14%, and 14%, respectively.

So what

Russian President Vladimir Putin's statements that Russia was planning to begin a wide-scale immunization program after approving a coronavirus vaccine sent investors into a tizzy. Despite warnings by U.S. and international scientists that Russia's claims regarding its vaccine had not yet been substantiated, many investors decided to sell their shares of COVID-19 vaccine and treatment stocks. That selling appears to be continuing today.

A downward sloping stock chart.

Many coronavirus-focused companies saw their stock prices fall sharply on Wednesday. Image source: Getty Images.

Moderna's (NASDAQ:MRNA) announcement late on Tuesday that it had struck a $1.5 billion deal with the U.S. government for its COVID-19 vaccine candidate could also be contributing to the declines. Investors in Novavax, Sorrento, Heat Biologics, Vaxart, and iBio may be growing increasingly concerned that, even if Russia's claims prove false, their companies may be falling behind Moderna -- whose stock was up about 1% on Wednesday -- and other competitors in the race for a coronavirus vaccine.

Now what 

Investors have bid up the shares of many companies that are working to develop coronavirus vaccines or treatments in recent months. Unfortunately, many of these companies will not be successful in their efforts. Shareholders appear to be adjusting their views of Sorrento, Vaxart, Novavax, iBio, Heat Biologics, and other vaccine stocks to reflect this reality. In the process, they're assigning them higher risk profiles, and, by extension, lower prices.