Why Moderna Stock Dropped Today

The biotech's coronavirus vaccine reportedly made some people sick.

What happened

Shares of Moderna (NASDAQ:MRNA) plunged on Wednesday, following reports that several of the participants in its novel coronavirus vaccine trial suffered an adverse reaction to its experimental drug mRNA-1273. 

By the close of trading, Moderna's stock was down 9.5% after falling as much as 20% earlier in the day.

So what 

Moderna's stock surged 20% on May 18 after it shared positive results from its phase 1 study for its COVID-19 vaccine candidate mRNA-1273. That same day, the biotech announced a stock sale and raised more than $1.2 billion in cash, which it said it would use to manufacture its coronavirus vaccine should it prove safe and effective. 

Since that day, Moderna's stock has shed more than a third of its value, as analysts questioned both the timing of the stock sale and whether the preliminary data justified the price at which shares were sold.

On Wednesday, a report from STAT News likely accelerated the decline in Moderna's share price. According to the report, 29-year-old trial volunteer Ian Haydon and two other trial participants experienced "a systemic adverse reaction to the vaccine."

 "Twelve hours after receiving his second dose, he developed a fever of more than 103 degrees, sought medical attention, and, after being released from an urgent care facility, fainted in his home," STAT News reporter Matthew Herper wrote.

Fortunately, Haydon quickly recovered.

Haydon reportedly came forward to warn of the dangers of hurrying a vaccine to market before it is proven to be safe:

As we rush to get a vaccine developed as quickly as possible, the reality of vaccine development is that it can only be rushed so much and the trial still needs to take place ... They have to move at the speed they move at. And stories like what happened to me, they matter because they shape the approval process.

Now what

It's important to note that Haydon's reaction to Moderna's drug is unlikely to halt its vaccine trials. Some adverse reactions will likely be viewed as acceptable for a potential vaccine that could help to protect people from COVID-19, a disease that has resulted in the deaths of more than 350,000 people around the world. 

Still, Haydon's story should serve as a warning to investors that plenty of risk remains in the development of Moderna's experimental vaccine -- and that there can currently be no assurances that it will prove to be both safe and effective.