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Why NVAX Stock Is Looking More Like a Bet Worth Taking

There is a lot of reason to be bullish on Novavax (NASDAQ:NVAX) stock. No, the company’s Covid-19 vaccine has not been granted FDA approval. But that truth in combination with delta variant concerns and international sales prospects make Novavax powerful. 

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Novavax burst onto the scene in a major way back in the summer of 2020. The company was one of the first names to emerge as a potential Covid-19 vaccine producer very early in the pandemic. 

Timeline of Hope/Disappointment 

Novavax made announcements regarding its NVX-CoV2373 vaccine in April 2020. This was, of course, early in the pandemic and caused lots of speculation. The company began trials in May 2020 and that triggered its stock price to begin a monumental climb. 

The company received a contract worth up to $70 million from the Department of Defense to manufacture its vaccine. That news sent the market into a frenzy as many believed the news signaled Novavax an early, obvious winner. 

If investors were hopeful on June’s DoD contract news, they would end up ecstatic in July. That’s because the company received $1.6 billion after being selected to participate in Operation Warp Speed. The government sponsored funding allowed Novavax to essentially prove that it can create large-scale manufacturing for NVX-CoV2373 and produce massive stockpiles of its vaccine.

Novavax was considered a front runner at this time as speculation ran rampant that the successive rounds of government funding almost ensured its imminent success. 

Reality Set In 

NVAX stock was riding high. Share prices had reached as high as $170 in July 2020, after trading below $20 in April. 

Then the reality of the vaccine development process as well as other questions would arise. Namely, July news that a Phase 3 trial would begin in November and questions about Novavax as a company would serve as a dose of reality to investors. 

Though early data was indeed promising, any potential vaccine authorization would take quite some time. The rapid development which characterized the period from April to July was slowing. 

It was also at this time that questions surrounding Novavax itself began to arise. Investors were wondering why the relatively small and unknown had been chosen as a recipient of such a large award. Many questioned whether the relatively small Maryland company was indeed capable. 

That would trigger a period of sideways trading for NVAX stock which would persist into 2021. 

February Bump 

In late January Novavax shares would see another massive spike in price. This time a spate of news including Canada advance purchases and U.K. Phase 3 trial results would set off the rapid climb. 

Investors speculated that Novavax would also receive Emergency Use Authorization after both Pfizer (NYSE:PFE)/BioNTech (NASDAQ:BNTX) and Moderna (NASDAQ:MRNA) received authorization in December and Johnson & Johnson’s (NYSE:JNJ) Janssen pharma arm received EUA in February. 

Ultimately Novavax still awaits FDA approval as the pandemic is proving to be more persistent than many may have imagined. 

Delta Concerns

One of the most pressing concerns about the pandemic is the Delta variant of the SARS-CoV-2 virus. The variant, first identified in India, swept through that nation and then into Great Britain. 

The Delta variant is the predominant variant of the original virus in the U.S. at present according to Yale Medicine

It appears that the three FDA approved vaccines provide protection from infection by the Delta variant. However, the highly contagious nature of the variant is causing concern. 

This opens a hypothetical window for Novavax’s vaccine should it receive FDA approval. There is vaccine hesitancy due to the rapidity with which the first three vaccines were developed and approved. 

Given that Novavax has yet to be approved there is a possibility that unvaccinated people might trust it to a higher degree. That seems somewhat illogical I’ll admit. But a lot about the pandemic has been arguably illogical. 

Takeaway

Hope remains for NVAX stock. The company published positive Phase 3 findings in the New England Journal of Medicine back in late June. As a gamble, Novavax’s timeline suggests it can run higher again quickly.  

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the biedexmarkets.com.com Publishing Guidelines.