Dive Brief:

• Shares in vaccine developer Vaxcyte soared by over 35% Tuesday after the company unveiled results from a large study testing its experimental pneumococcal shot that analysts described as a best-case scenario.
• Data from the Phase 1/2 trial showed Vaxcyte’s vaccine matched the effectiveness of Pfizer’s market-leading Prevnar 20 in protecting against 20 common strains of the bacteria that causes invasive pneumococcal disease, the company said.
• Vaxcyte’s shot covers an additional 11 strains than Prevnar 20, for a total of 31. The company plans to advance its vaccine into a Phase 3 trial program in adults. Initial data from the first study in that program could come by 2026, Vaxcyte said.

Dive Insight:

Investors and analysts have been closely tracking Vaxcyte’s candidate. While Tuesday’s results are from a mid-stage test, the stock market reaction indicates Wall Street sees it as a potential competitor to pneumococcal vaccines from Pfizer, Merck & Co. and GSK.

Pfizer, in particular, has been dominant with its Prevnar 20 shot. In an Aug. 14 note to clients, Mizuho Securities analyst Salim Syed noted how Vaxcyte could “disrupt Pfizer’s 20-year [plus] near monopoly” on an $8 billion market.

Approved in 2021 for adults 18 years or older, Prevnar 20 was more recently cleared to include use in infants and children. It has become the go-to option over others, including an earlier shot from Pfizer and two others from Merck.

New competitors have advanced, however. In June, Merck gained approval from the Food and Drug Administration for its latest shot, called Capvaxive. That vaccine protects against 21 serotypes, including eight that are not covered by other approved shots. Advisers to the Centers for Disease Control and Prevention have since recommended Capvaxive in adults 65 years and older and young adults who have not previously received a shot and who have certain underlying health conditions.

While Vaxcyte’s competing product has a ways to go before reaching market, the early data has set high expectations. “Essentially, what we got today was the best-case scenario with zero misses,” Syed wrote in a Tuesday morning note to investors.

Vaxcyte’s study enrolled 1,015 healthy adults 50 years or older and tested three doses of the company’s shot against placebo.

The highest dose produced the strongest immune response, matching the efficacy of Prevnar 20 on all serotypes covered by that shot. Across seven of those serotypes, the immune response spurred by Vaxcyte’s product was statistically greater than those produced by Pfizer’s.

The middle and low doses also performed well against Prevnar 20, but were superior on fewer serotypes. All three doses outperformed Prevnar 20 on the 11 serotypes not covered by Pfizer’s vaccine.

Vaxcyte also said its vaccine appeared safe and tolerable. Local and systemic reactions to vaccination were “generally mild-to-moderate,” the company said, and resolved within days. There were no serious adverse events that study investigators judged to be related to the vaccine.

With the stock price jump Tuesday, Vaxcyte is now worth more than $12 billion.