Moderna, BioNTech tumble 19% amid report the EU is looking into COVID vaccine side effects

• Moderna and BioNTech shares dropped sharply on Wednesday amid reports the European Union is looking into potential side effects from their COVID-19 vaccines.
• The agency is looking into possible side effects related to the skin and kidneys.
• Moderna was dragged further away from Monday's closing high and the $200 billion market cap it achieved that day.

Shares of biotech firms Moderna and BioNTech fell sharply on Wednesday following a report that European Union's drug regulator is investigating potential new side effects from the companies' respective COVID-19 vaccines.

The European Medicines Agency said Wednesday it has started assessing reports about conditions related to the skin and kidneys following vaccinations using Comirnaty, developed by Pfizer and BioNTech, and Spikevax, the product from Moderna. The notifications from the agency were reported by Reuters.

Both Moderna and US-listed shares of Germany-based BioNTech dropped as much as 19%. Moderna's drop pulled the stock further away from a record high reached on Monday. Pfizer shares fell 4% at intraday lows.

The EMA said "a small number of cases" about potential side effects were reported but it didn't specify how many.

The agency's Pharmacovigilance Risk Assessment Committee is trying to establish if Erythema multiforme, an allergic reaction characterized by round skin lesions; glomerulonephritis, or inflammation of tiny filters in the kidneys; and nephrotic syndrome are side effects in each vaccine. Nephrotic syndrome is a disorder that causes the kidneys to leak too much protein in the urine.

"Further data and analyses have been requested from the marketing authorisation holder to support the ongoing assessment," by the committee, the agency said in each notice.

Moderna shares on Monday surged 17% to a record closing high, in part after its coronavirus vaccine won approval for use in Australia, and Switzerland cleared it for injections to young people aged 12 to 17 years. Moderna's valuation climbed near $200 billion on Monday stemming from a massive rally of more than 360% during the year. The valuation made Moderna worth more than drug and vaccine giant Merck.

The valuation is "unjustifiable on a fundamental basis," Bank of America said in a note on Tuesday. The bank reiterated its target price of $115, which had represented a potential downside of 76% from Monday's close. Moderna's stock fell by 5.7% on Tuesday.