What happened

Global biopharma giant AstraZeneca (AZN -0.59%) briefly lost approximately $11.3 billion in market capitalization after the closing bell Tuesday afternoon. The drugmaker's shares sank by as much as 8% in after-hours trading yesterday in response to the news that the large phase 3 trial of its COVID-19 vaccine, which is being co-developed with the University of Oxford, has been put on hold due to a potential adverse reaction in a participant.

AstraZeneca's stock has since rebounded to a large degree, thanks to reassuring comments from British health minister Matt Hancock about the routine nature of this safety review. However, the company's stock is still off by around 2.36% in pre-market action Wednesday morning. 

Stacks of hundred dollar bills.

Image source: Getty Images.

So what

AstraZeneca is in a close race with Pfizer and Moderna to be among the first Western-based companies to successfully develop a COVID-19 vaccine. In fact, there have been multiple rumors swirling of late that AstraZeneca's vaccine candidate may be approved ahead of the U.S. presidential election on a conditional, accelerated basis, although the company has openly pledged not to rush the vaccine's regulatory review.

This pause in the vaccine's pivotal trial, though, could give an important competitive edge to Pfizer and Moderna, depending on how long it lasts. AstraZeneca's shareholders were clearly unsettled by this possibility, which is understandable given that the first wave of commercial-stage COVID-19 vaccines are all expected to be high-value products for their manufacturers.  

Now what

AstraZeneca plans to complete a safety review of the incident as soon as possible in order to get this key trial back on track. That said, this overtly negative reaction among investors to this trial halt is arguably unwarranted. AstraZeneca has one of the best product portfolios, clinical pipelines, and shareholder rewards programs in the industry. Moreover, this single vaccine is not a make-or-break product for this top pharma company -- not by a long shot. Bargain hunters, in turn, may want to buy AstraZeneca's shares on any weakness stemming from this news.