Biotech Stocks: Novavax (NVAX)
Type: Small-cap stock
Market Cap: $972 million
Novavax (NVAX) is a clinical-stage biopharma firm that creates vaccines and vaccine adjuvants to protect against infectious diseases like influenza. The company has developed a proprietary approach that uses “recombinant protein nanoparticles” to customize vaccines that can protect against new or mutant infectious disease strains.
If a new strain of the flu appears, NVAX’s approach can strip off the surface proteins of the virus or pathogen to trigger an immune response without exposing patients to the virus. Last month, the U.S. Health and Human Services Department extended its contract with NVAX, which funds the upcoming Phase II trial for the company’s H7N9 avian flu vaccine.
The company also is working on vaccines for respiratory syncytial virus (RSV), a common cause of lower respiratory tract infections in children.
NVAX, which reported fourth-quarter earnings last week, lost 7 cents a share, beating the Street by a penny. Revenue skyrocketed 89% year over year to $8.7 million.
The Takeaway: NVAX shares have gained 150% in the past year and the company is well positioned with a promising proprietary technology — demand for these vaccines will be global. As a small-cap biotech stock with a fairly focused pipeline, risk and volatility are part of the equation — and profits will not come quickly. This stock is best suited for investors who are looking for aggressive growth, have a longer investment horizon and have a higher-than-average tolerance for risk.