Vaxcyte stock surged Monday after late-stage trial results signaled its lead vaccine candidate could steal significant share from Pfizer and Merck in a multi-billion-dollar market.

Vaxcyte's pipeline prospect, VAX-31, targets 31 strains of the bacteria responsible for pneumonia, meningitis, and bacteremia. The vaccine generated immune responses at least comparable to Pfizer's Prevnar 20 and Merck's Capvaxive across the 28 bacterial strains, or serotypes, shared with either vaccine. Beyond matching its competitors, VAX-31 triggered stronger responses against strain 20B as well as three strains unique to the shot, Vaxcyte said.

Vaxcyte stock surged 57% to $88.70 on Monday, pacing toward the largest single-day percentage increase since October 2022, according to Dow Jones Market Data. Pfizer and Merck fell 1.3% and 2.4%, respectively.

In the most optimistic scenario, the mid-cap vaccine developer is poised to capture market share from far larger and more entrenched players. Jefferies analyst Roger Song framed the trial results as a "blue-sky" case that exceeded management's own expectations, adding that they clearly support regulatory approval. From Song's perspective, Vaxcyte is poised to capture significant share of a burgeoning market that could reach between $3 billion and $6 billion in the future.

These numbers only reflect the opportunity among adults, which makes sense given their higher risk profile. Regardless, it's a lucrative space: The Prevnar family of vaccines generated nearly $6.5 billion last year, standing as Pfizer's second-largest revenue contributor behind Eliquis.

In separate comparisons, VAX-31 met the trial's main goal for all 20 strains shared with Prevnar 20, as well as 17 of the 19 shared with Capvaxive. For the remaining two strains, VAX-31 fell short of the primary benchmark but reached a historical threshold.

Leerink Partners analyst David Risinger noted that the miss against Capvaxive on serotype 3 stemmed from a tougher trial standard and is unlikely to carry regulatory significance. "We expect physicians and patients to prefer VAX-31 over Prevnar 20 and Capvaxive since it offers the broadest protection against disease," he wrote.

Vaxcyte is slated to report results from two other late-stage ?trials ?in the first half of next year, followed by a U.S. marketing application in the first half of 2028.