This week hasn't been a great one for COVID-19 vaccine stocks. Shares of BioNTech (NASDAQ:BNTX) were down 10.2% for the week, as of the market close on Thursday. Moderna (NASDAQ:MRNA) stock fell 7.5%, and Novavax (NASDAQ:NVAX) tumbled 14.2%.
The decline for Novavax might be the most puzzling. On Monday, the company announced overwhelmingly positive results from a late-stage study of its COVID-19 vaccine candidate that was conducted in the U.S. and Mexico.
Novavax's good news explained, at least in part, why shares of BioNTech and Moderna fell. The increasing likelihood that another highly effective COVID-19 vaccine could soon be available could mean that the overall global market opportunity for BioNTech (along with its big partner, Pfizer) and Moderna could be reduced somewhat.
So why did Novavax stock sink the most out of these biotech stocks? It could be that investors followed the old adage to "buy the rumor and sell the news." Shares of Novavax surged nearly 50% in the weeks leading up to the company's announcement of its late-stage results.
Over the long run, the pullbacks for these vaccine stocks this week won't matter much at all, and there's no cause for investors to be alarmed. Actually, the declines could present a buying opportunity.
The prospects for BioNTech, Moderna, and Novavax should be strong. Orders for the already-authorized COVID-19 vaccines from Pfizer-BioNTech and Moderna keep coming in. Just this week, for example, the U.S. government agreed to buy another 200 million doses of Moderna's vaccine.
Novavax has another major catalyst on the way soon. The company expects to file for authorizations in the U.S., U.K., and Europe in the third quarter.
Probably the most important thing to watch for BioNTech and Moderna is how their vaccines hold up against the emerging coronavirus variants. That's especially the case for the Delta variant first discovered in India, which has proven to be more contagious and severe than other variants.
Another critical question that remains to be answered is the duration of protection for the leading COVID-19 vaccines. For BioNTech and Moderna, preliminary answers should be on the way in the fall when the first participants in their clinical trials hit their 12-month post-vaccination marks.
Some experts think that booster doses will be needed within 12 months. If so, the companies should be able to count on recurring revenue from their COVID-19 vaccines on an annual basis.