Key Highlights

  • Vaxcyte reported positive topline results from its pivotal Phase 3 trial of VAX-31 in adults.
  • The Vaccine met all prespecified primary endpoints compared with two rival shots from Pfizer and Merck.
  • Guggenheim called the result "a major win" and raised its price target to $125 from $116.
  • The study enrolled 4,047 participants with no vaccine-related serious adverse events reported.

Vaxcyte shares soared on Monday, Oct. 5, after its VAX-31 pneumococcal vaccine met all of its main goals in a pivotal trial, and Guggenheim called the result "a major win."

A Pivotal Trial Delivers

Vaxcyte (NASDAQ:PCVX) was one of the biggest gainers in the Russell 1000 on Monday after it reported positive topline results from OPUS-1, the pivotal Phase 3 trial of its VAX-31 vaccine in adults.

VAX-31 is a 31-valent pneumococcal conjugate vaccine, designed to protect against more strains of the bacteria that cause pneumonia and other serious infections than the shots now on the market. In OPUS-1, it met all prespecified primary endpoints when compared with Pfizer's (NYSE:PFE) Prevnar 20 and Merck's (NYSE:MRK) Capvaxive in adults aged 50 and older, the company said.

The study enrolled 4,047 participants at about 30 US sites, and no vaccine-related serious adverse events were reported, according to the company.

The shares soared, though reports differed widely on how far. The gains appeared to fade from their premarket highs as the session went on, but the stock still finished the day sharply higher.

Guggenheim's Verdict

Guggenheim was enthusiastic about the readout. Analyst Seamus Fernandez raised his price target to $125 from $116.

Fernandez said the adult VAX-31 OPUS-1 Phase 3 result was a major win not only against investor expectations, delivering the firm's best-case scenario, but also setting up VAX-31 for clear commercial leadership.

The commercial stakes are high. Pneumococcal vaccines are a large market led today by big drugmakers such as Pfizer and Merck, the makers of the two comparison shots.

Vaxcyte chief executive Grant Pickering struck a similar tone, saying VAX-31's combination of broader coverage and robust immune responses set a new benchmark for the class.

Ripples Across Health Care

The data put vaccines in the spotlight. Novavax (NASDAQ:NVAX) also rallied, lifted by Vaxcyte's data alongside reports of a suspected plague case at a Russian lab, a case that has not been confirmed. Moderna (NASDAQ:MRNA) rose ahead of joining the Nasdaq-100 on Oct. 9.

Merck and Pfizer both fell on Monday, with Merck the worst performer in the Dow. No report directly tied those moves to Vaxcyte's results.

Health care overall was the weakest S&P 500 sector at midday, while life-science tools makers such as Charles River Laboratories (NYSE:CRL) rallied.

The broader market rose. The Nasdaq Composite gained 286.45 points to a record 27,477.31 and the Nasdaq-100 closed at a record 31,076.44. The S&P 500 rose 51.23 points to 7,773.95, just shy of its record, while the Dow added 90.94 points to 51,267.90. The Russell 3000 rose to 4,400.47.

Rates stayed high, with the 10-year Treasury Yield climbing to its highest level since 2002, even after a weak September jobs report showed payrolls rising by only 29,000. The soft data cut bets on an October Fed hike, but the ISM services survey showed prices paid at their highest since July 2022.

What to Watch Next

Vaxcyte's next milestones are data from its OPUS-2 and OPUS-3 studies, expected in the first half of 2027. The company plans to submit its application to the FDA in the first half of 2028.

On the macro side, the Fed releases minutes of its September meeting on Wednesday, Oct. 7, at 2 p.m. ET. For Vaxcyte, the OPUS-2 and OPUS-3 data due in the first half of 2027 will likely matter far more to the stock.