The race to find a vaccine for the novel coronavirus certainly takes investors on a roller-coaster ride. If you’re looking to find the company with the best chance of bringing a profitable vaccine to market, one name you have to consider is Novavax (NASDAQ:NVAX) stock.
True, this Maryland company has never successfully brought a vaccine to market. And granted, there are plenty of other interesting names out there working on a vaccine, including Moderna (NASDAQ:MRNA) and iBio (NYSEAMERICAN:IBIO).
But Novavax is turning heads after receiving a $1.6 billion federal grant to put toward trials, marketing and manufacturing of its Covid-19 vaccine, known as NVX-CoV2373.
It’s the largest grant made available by Washington’s Operation Warp Speed program and marks a show of faith that the biotech company could be a major player in ending the scourge from Covid-19.
With that in mind, let’s take a closer look at Novavax.
NVAX Stock at a Glance
Novavax has a market capitalization right now of $8 billion and is priced at $138 per share, but it sure didn’t look like that at the beginning of the year. In fact, NVAX stock had been trading at less than $10 per share for much of 2019.
It didn’t start moving higher until the first reports of a mysterious virus in China began circulating this January.
Year-to-date, the stock is up more than 3,000% as Novavax took an increasingly visible role in the search for a vaccine. The company previously worked with the MERS and SARS coronavirus, giving it a unique insight into Covid-19.
By February, Novavax was already involved in animal testing for a coronavirus candidate and announced hoped to start human trials by spring.
In April, the stock took another 14% surge higher by unveiling NVX-CoV2373 as its Covid-19 virus candidate with human trials to begin the following month.
Then in May, NVAX stock skyrocketed by nearly 80% in a single day on the announcement that the Coalition for Epidemic Preparedness Innovations (CEPI) will invest $388 million to push forward the development of the vaccine.
Novavax announced it would be able to produce 100 million doses of its vaccine, if approved, by the end of the year and can create 1 billion doses in 2021.
Finally in July, the Trump administration made its $1.6 billion award to Novavax – an award that got the attention and a major write-up in The New York Times.
The Trump administration has said it wants to invest in a variety of vaccine technologies, and Novavax — which uses coronavirus proteins to provoke an immune response — offers an approach that is distinct from those of other companies that have already received major federal backing. Its method’s potential to quickly manufacture millions of doses was also attractive to the federal government and Dr. (Richard) Hatchett’s organization (CEPI). The success this spring of a clinical trial of Novavax’s flu vaccine boosted confidence in the company.
Can Novavax Win the Vaccine Race?
No doubt, the company has a lot going for it. Now flush with deep pockets and with the backing of CEPI, Novavax is a legitimate alternative for investors who are looking to hedge their bets on which company will cross the vaccine finish line first.
Moderna, whose vaccine candidate was the subject of a July 14 article in the New England Journal of Medicine, is rightly seen as the frontrunner. Moderna is a solid growth pick. Its vaccine candidate is based on messenger RNA (mRNA) technology, while Novavax is using adjuvanted recombinant nanoparticle vaccine technology.
Of note, Novavax also completed phase 3 clinical trials of its flu vaccine candidate, known as NanoFlu, in March. If that vaccine is approved, Novavax could see hundreds of millions in new revenue, even without the Covid-19 work.
The Bottom Line on NVAX Stock
It’s not often you see a stock rise from the gutter to the top of the mountain as quickly as Novavax. Full-year revenues in 2019 were only $18.7 million, and now it’s working with a $1.6 billion grant.
While it’s no guarantee that NVAX stock will be the ultimate winner from a Covid-19 vaccine, the company’s research and partnership with CEPI demand that investors pay attention.
Patrick Sanders is a freelance writer and editor in Maryland, and from 2015 to 2019 was head of the investment advice section at U.S. News & World Report. Follow him on Twitter at @1patricksanders. As of this writing, he did not hold a position in any of the aforementioned securities.