The biotech sector experienced a broad decline on Thursday, with Eli Lilly (LLY.US) dropping more than 3%, Merck (MRK.US) falling over 2%, Johnson & Johnson (JNJ.US) down 2%, and Novo Nordisk (NVO.US) and AbbVie (ABBV.US) each declining more than 1%.

Recently, clinical-stage vaccine company Vaxcyte released key Phase III trial results for its adult 31-valent pneumococcal conjugate vaccine VAX-31, a development that has stirred sentiment across the entire pharmaceutical sector. The clinical data showed that VAX-31 has a favorable safety profile and met the non-inferiority standard for serotypes covered by existing mainstream 20-valent and 21-valent vaccines. The company plans to submit a marketing application to the FDA in the first half of 2028.

Although there is still a considerable timeline before the product reaches commercialization, the capital market has already viewed this high-valent vaccine as an important signal of a potential reshaping of the pneumococcal vaccine landscape. Under the transmission of market sentiment, industry leader Merck has drawn significant attention. Merck holds an already-commercialized 21-valent pneumococcal vaccine and is a core player in the global adult pneumococcal vaccine segment. VAX-31 raises serotype coverage to 31 types, leading the market to anticipate that if subsequent approvals proceed smoothly and commercialization is well executed, the new product could exert direct competitive pressure on Merck's existing flagship product.