Shares of Moderna (NASDAQ:MRNA) were slipping 4.2% as of 10:49 a.m. EST on Friday after falling more than 6% earlier in the morning. The decline came after a U.S. Food and Drug Administration (FDA) advisory committee voted unanimously late Thursday afternoon to recommend Emergency Use Authorization (EUA) for Moderna's COVID-19 vaccine.
Why did Moderna's shares slide after great news from the FDA advisory committee? You can probably chalk it up to the old investing adage, "Buy the rumor, sell the news."
The biotech stock has skyrocketed more than 600% year to date as enthusiasm grew about the prospects for coronavirus vaccine candidate mRNA-1273. As Moderna reported more and more good news for its experimental vaccine in recent months, its stock moved higher and higher.
Moderna has agreed to supply 200 million doses of mRNA-1273 to the U.S. government if mRNA-1273 wins EUA. That means the biotech, which to date hasn't had any products on the market, will soon have billions of dollars pouring into its coffers.
However, all of this is largely priced into Moderna's share price. Some investors appear to be thinking that it's best to lock in profits now by selling the stock.
Technically, the FDA could choose to ignore its advisory committee's recommendation. However, that seems highly unlikely. Emergency Use Authorization for mRNA-1273 could come later today. Assuming that happens, the first Americans will probably begin receiving Moderna's COVID-19 vaccine beginning next week.