Just a week after Moderna earned the unwelcome title of the most shorted stock in the S&P 500 as fewer Americans roll up their sleeves, the company ran into yet another problem. 

Shares fell more than 4% on Monday after the FDA signaled it wants tougher testing rules for new vaccines, outlined in a memo from senior official Vinay Prasad.

According to the memo, reviewed by Bloomberg, concerns about the possibility that Covid vaccines may have contributed to the deaths of 10 children led the agency to re-evaluate how companies bring new products forward. Under the planned approach, vaccine makers would need to run additional studies and provide more extensive data before receiving approval.

Shares across the vaccine group moved lower right away. Moderna lost 4.1% at the open, BioNTech slid 2.1%, Novavax dropped 3.1%, and Vaxcyte fell nearly 10%. Investors viewed the announcement as a sign that development efforts could become more expensive and take more time.

Prasad also said the FDA intends to revise its guidance for flu vaccines and request more evidence from companies seeking authorization. Standards for vaccines marketed to pregnant women will be stricter, and pneumonia vaccines will need stronger proof of disease reduction.

These moves arrive during a period of new policy direction at the Department of Health and Human Services under Secretary Robert F. Kennedy Jr. The FDA has already limited access to Covid vaccines, allowing them mainly for older adults and people with underlying conditions. A government advisory panel has also recommended removing several long-used vaccine ingredients, despite long-standing research supporting their safety.

In late November, the Centers for Disease Control and Prevention updated a webpage to suggest vaccines may contribute to autism, a position that differs from decades of scientific consensus. Public health groups criticized the revision, warning it could weaken confidence in standard immunization programs.

Moderna now faces added uncertainty as it works to advance multiple products. The company plans to seek authorization for its flu vaccine in the U.S., Europe, Australia, and Canada by January. Its combined flu/Covid shot is further behind, as Moderna waits for updated guidance from U.S. regulators.

Analysts at William Blair said Prasad’s memo suggests Moderna’s flu vaccine could face a more detailed safety review. They also anticipate new obstacles for the company’s Covid franchise if further restrictions emerge.

Companies with several products in development (including Moderna) will be watching closely as the FDA finalizes its new requirements.

At the time of publishing this article, Stocks.News holds positions in Moderna as mentioned in the article.