What happened

Shares of the COVID-19 vaccine developers Moderna (NASDAQ:MRNA) and Novavax (NASDAQ:NVAX) are both marching higher today. In response to the news that AstraZeneca (NASDAQ:AZN) and partner Oxford University will likely have to run another late-stage trial for their COVID-19 vaccine candidate in order to gain regulatory approval in the U.S., Moderna's stock was up by a healthy 11.4%, while Novavax was higher by 11.8% as of 9:49 a.m. EST Friday morning. 

So what

A few short months ago, AstraZeneca and Oxford's COVID-19 vaccine appeared to be well on its way toward becoming one of the first products on the market. After the discovery of a major dosing error in its late-stage trial, however, this once-promising vaccine now seems destined to end up as a second- or perhaps third-tier product.

A researcher injecting a minature earth with a vaccine.

Image source: Getty Images.

That opens the door in a big way, from a commercial standpoint, for smaller companies like Moderna and Novavax. Moderna's messenger RNA (mRNA) vaccine has already posted outstanding results in its late-stage trial. The company, in turn, is expected to seek an Emergency Use Authorization from the Food and Drug Administration within the next few days. 

Novavax, by contrast, is slightly behind the pack with its more traditional protein-based vaccine, but it may also enjoy some key logistical advantages over the current front-runners from Moderna and Pfizer. Novavax, in fact, now has a strong chance at grabbing the third U.S. approval for a COVID-19 vaccine following Astra's clinical slipup. 

Now what

The simple reason investors are bidding up Moderna and Novavax shares today is that Astra's setback could translate into hundreds of millions (if not billions) in additional sales for their vaccine candidates. That's a solid rationale for these double-digit moves to be sure.

Longer term, though, these innovative biotechs may have even more room to run. Moderna has a highly diverse pipeline of high-value mRNA vaccines and therapeutics; whereas Novavax could easily evolve into a two-product company (COVID-19 and flu vaccines, respectively) before the end of 2021. So if you missed today's moves, it might still be worth grabbing some shares of both biotechs

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.