Here’s Why Vaxcyte (PCVX) Sold Off in Q1

Carillon Tower Advisers, an investment management company, released its “Carillon Eagle Small Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Small-cap stocks experienced a significant drop in Q1, with the Russell 2000 Growth Index (down 11.12%) trailing the Russell 2000 Value Index (down 7.74%). In the Russell 2000 Growth Index, real estate, which increased by 1.76%, outperformed all sectors both absolutely and relatively. The only other sector delivering positive returns was consumer staples, which rose by 0.67%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Carillon Eagle Small Cap Growth Fund highlighted stocks such as Vaxcyte, Inc. (NASDAQ:PCVX). Vaxcyte, Inc. (NASDAQ:PCVX) is a clinical-stage biotechnology vaccine company that focuses on developing novel protein vaccines to prevent or treat bacterial infectious diseases. The one-month return of Vaxcyte, Inc. (NASDAQ:PCVX) was -1.09%, and its shares lost 52.68% of their value over the last 52 weeks. On May 23, 2025, Vaxcyte, Inc. (NASDAQ:PCVX) stock closed at $32.54 per share with a market capitalization of $4.198 billion.

Carillon Eagle Small Cap Growth Fund stated the following regarding Vaxcyte, Inc. (NASDAQ:PCVX) in its Q1 2025 investor letter:

“Vaxcyte, Inc. (NASDAQ:PCVX) is a leading biotechnology company focused on developing vaccines. The company is developing VAX24/VAX-31 for the prevention of pneumococcal disease in infants and adults. Phase 2 trial results for VAX-24 in infants were announced, demonstrating non-inferiority to another drug on nearly all serotypes tested. While the results were promising enough to proceed to phase 3, they were not as robust as previous VAX-24 trials. Additionally, the resignation of a key U.S. Food and Drug Administration leader, Dr. Peter Marks, shortly before the results were unveiled, raised concerns in the vaccine industry and contributed to a significant selloff in the stock. Despite these challenges, the company remains optimistic about the future of VAX-24 in phase 3 trials.”

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A research scientist in a laboratory holding a vial of a biotechnology drug.

Vaxcyte, Inc. (NASDAQ:PCVX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held Vaxcyte, Inc. (NASDAQ:PCVX) at the end of the first quarter, which was 50 in the previous quarter. While we acknowledge the potential of Vaxcyte, Inc. (NASDAQ:PCVX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Vaxcyte, Inc. (NASDAQ:PCVX) and shared the list of stocks that will bounce back according to analysts. The fund stated in its Q4 2024 investor letter that Vaxcyte, Inc. (NASDAQ:PCVX) underperformed due to uncertainty surrounding its key vaccine candidates amid political shifts. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.