Vaxcyte shares rocketed to a record high Tuesday after the biotech company delivered "stunning" test results for its pneumococcal vaccine.
In a study of 1,015 adults age 50 and older, the shot protected against 31 strains of pneumococcal disease. Pneumococcal disease can cause meningitis, pneumonia, ear and sinus infections, and other illnesses.
Importantly, the vaccine called VAX-31 offered the same or better protection against the 20 strains blocked by Pfizer's Prevnar 20. Leerink Partners analyst David Risinger said the Street expected the Vaxcyte shot to lag Prevnar 20 on three of the 20 strains. But the high and middle doses didn't miss on any.
Now, Vaxcyte is planning to move into Phase 3 testing.
"We believe the data support strong likelihood that VAX-31 could achieve majority market share in what we expect to be a more than $10 billion pneumococcal conjugate vaccine market in 2030-plus," Risinger said in a report.
On today's stock market, Vaxcyte stock launched 36.4% to close at 110.15. Shares hit their highest-ever point. Pfizer stock, on the other hand, sank 2.5% to 28.30.
Vaxcyte Takes On Pfizer And Merck
Risinger described Vaxcyte's results as "stunning" and reiterated his outperform rating on shares.
Mizuho Securities analyst Salim Syed said Vaxcyte's study offers a best-case scenario. A high dose of VAX-31 led to better immune responses against 18 of the 20 strains included in Prevnar 20. The middle dose outperformed on 13 of the 20 strains.
For the 11 strains note included in Prevnar 20 and unique to VAX-31, all three doses tested met the superiority criteria, Vaxcyte said in a news release.
Syed estimates this could ultimately be a $24 billion market. Merck also sells Capvaxive, a vaccine that protects against 21 strains of pneumococcal disease. Merck shares fell 1.6%, closing at 116.58.
"Recall, the total addressable market and market cap up for grabs, has only grown over time and can still do so," he said. "VAX-31 has the potential to displace Prevnar 20 and one could argue even Merck's Capvaxive."
He rates Vaxcyte stock an outperform with a 113 price target.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
