The stock market started out the new week on a positive note, with sharp advances in major market benchmarks. As of 1:30 p.m. ET, the Dow Jones Industrial Average (^DJI -1.25%) was up 720 points to 35,300. The S&P 500 (^GSPC -2.31%) gained 61 points to 4,599, and the Nasdaq Composite (^IXIC -3.64%) rebounded 120 points to 15,206.

For the most part, optimism on Wall Street centered on hopes that the global economy would be able to withstand any short-term impacts of new COVID-19 variants and keep rebounding from the huge disruptions near the beginning of the pandemic. However, that sent vaccine stocks down sharply. Many investors now have to wonder: with their main growth driver seemingly starting to wind down, will vaccine stocks keep struggling going forward? Below, we'll look at just how bad the damage was and what could lie ahead for these companies.

Patient getting an injection from a healthcare professional.

Image source: Getty Images.

These stocks aren't looking as healthy as they did

The declines for vaccine stocks were widespread and significant. Taking the biggest hits were Moderna (MRNA -2.52%) and BioNTech (BNTX -2.76%), which were down 15% and 16% respectively on Monday afternoon. The two stocks have gotten a huge amount of their overall success from how they've been able to handle the COVID-19 problem, but as more people start to look beyond the pandemic, worries about what the companies will do for an encore seem to be weighing on sentiment.

Other vaccine stocks saw somewhat smaller drops. Novavax (NVAX -6.04%), which is still hoping to get its vaccine candidate in front of patients, saw its stock drop about 9%. Even Pfizer (PFE 1.63%), which has a far broader business than just COVID-19 vaccines, suffered a 4% decline Monday afternoon. Only Johnson & Johnson (JNJ 2.58%) seemed able to buck the trend, with its massive consumer health and conventional pharmaceuticals and medical device businesses helping to spur a 2% rally for the stock.

The big drops for vaccine stocks seem to signal the potential beginning of the end of their bull market runs. Yet there are at least a few reasons to think that the best times might not yet be over for at least some of these companies.

Getting a boost?

This isn't the first time that vaccine stocks have seen a loss of confidence from investors. However, as the need for boosters beyond the initial one or two doses of COVID-19 vaccines became apparent, it started to show the potential for ongoing revenue streams for these companies. In particular, early results suggest that Moderna has been a disproportionate winner in terms of attracting interest in its COVID-19 boosters, with more people turning to the company for the first time than the Pfizer-BioNTech collaboration or to Johnson & Johnson.

More importantly for Moderna, BioNTech, and other players in the mRNA space, COVID-19 has been a proof of concept for the idea of responding rapidly to an emerging health threat. Being able to produce a workable vaccine and getting it approved for emergency use in less than a year was a huge victory for the biotech industry as a whole. Although no one wants similar health threats to emerge in the future, there's plenty of room for innovation in fighting a whole host of diseases that affect millions of people around the world. If the lessons that vaccine makers have learned from fighting COVID-19 have any value at all in informing their future strategies, then the companies could have a lot further to grow in the future.

In the short run, it's entirely possible that negative investor sentiment could send vaccine stocks still further downward. Yet at some point, it's likely that pessimism will get overblown. At that point, smart shareholders might well understand that this is now just the end of the beginning for some vaccine stocks.