What happened
Actions of Modern (NASDAQ: MRNA) they slipped 4.2% since 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 the emergency use authorization (EUA) for the Modern COVID-19 vaccine.
So what
Why did Moderna’s shares decline after the good news from the FDA advisory committee? You can probably see it up to the old investment saying, “Buy the rumor, sell the news.”
Image source: Getty Images.
The biotech stock has grown by more than 600% so far as enthusiasm for the prospects for the mRNA-1273 coronavirus vaccine has grown. As Moderna reported more and more good news for its experimental vaccine in recent months, its stock grew more and more.
Modern has agreed to provide 200 million doses of mRNA-1273 to the US government if mRNA-1273 wins EUA. This means that biotechnology, which has so far had no product on the market, will soon have billions of dollars to be poured into its homes.
However, all of these are largely valued at the price of the Moderna stock. Some investors seem to think that it is best to block profits now by selling shares.
Now what
Technically, the FDA may choose to ignore the recommendations of its advisory committee. However, this seems extremely unlikely. The emergency use authorization for mRNA-1273 could come later today. Assuming this happens, the first Americans will likely start receiving the Modern COVID-19 vaccine starting next week.