The acquisition of a substantial stake by a major pharmaceutical company like Merck & Co is typically viewed as a strong vote of confidence in the smaller company's prospects, which can lead to increased investor interest and a rise in stock price. The announcement of an expanded commitment to cancer vaccine development further strengthens the positive outlook for Evaxion Biotech, suggesting potential for growth and innovation.

Merck & Co's investment in Evaxion Biotech may be part of a strategic move to collaborate on or benefit from advancements in cancer vaccines. While the impact on Merck's stock may not be as pronounced due to its larger size, the investment could still be seen positively if it leads to successful developments in a high-interest area of medicine.