As the race to identify and bring a novel coronavirus vaccine to market heats up, biotechnology-sector investors should appreciate that this is an international effort. In that light, a pivotal development in Europe for Novavax (NASDAQ:NVAX) should provide encouragement to NVAX stock holders.
The company’s shareholders were undoubtedly in need of some good news as the Novavax share price plunged on Aug. 11 and 12. Thankfully, a headline-grabbing deal with the government of the United Kingdom seems to have arrested the stock-price decline.
Sometimes it just takes a catalyst for the bulls to stage a share-price recovery. This particular catalyst could benefit not only NVAX investors, but also the global community if it leads to the discovery of an effective Covid-19 vaccine.
A Closer Look at NVAX Stock
The ascent of NVAX stock in 2020 has been mesmerizing. While the onset of Covid-19 caused many stocks to crater this year, it only seems to have boosted the NVAX share price.
If you can believe it, NVAX stock was trading near $4.50 at the beginning of the year. That’s a far cry from where the shares are trading at today. By Aug. 10, NVAX had run all the way up to $178.51 per share.
However, a two-day share-price slide then took place wherein NVAX stock dropped to $124.42. A significant vaccine-development agreement put a stop to that decline, though, and NVAX shares settled at $146.51 on Aug. 14.
Looking back through the years, we can observe that NVAX stock has traded above $200 on more than one occasion. If the bulls can maintain their momentum, it’s conceivable that NVAX could retake $200 within the next couple of months.
A Catalyst Across the Pond
What took place recently in the United Kingdom is a textbook example of why investors should pay attention not only to the local news, but also to international developments.
Specifically, Novavax signed an agreement known as a Heads of Terms with the U.K. government. In that agreement, the U.K. government will purchase 60 million doses of Novavax’s Coved-19 vaccine candidate, which is called NVX-CoV2373.
Moreover, Novavax will partner with the U.K. government during 2020’s third quarter to work on a phase III study to assess NVX-CoV2373’s efficacy on the U.K.’s population. This will be a double-blind, randomized trial involving around 9,000 adults.
“The trial will assess the ability of NVX-CoV2373 to protect against symptomatic COVID-19 disease as well as evaluate antibody and T-cell responses,” Novavax said.
As for the 60 million doses of NVX-CoV2373, Novavax hopes to provide them as early as 2021’s first quarter.
Staying Busy
Needless to say, Novavax has a lot on its plate now. This biotech firm, which was seldom discussed among traders prior to 2020, is now thrust into the spotlight and the pressure is on.
Keep in mind that Novavax already has a deal in place with the U.S. government. In it, the company agreed to provide 100 million doses of NVX-CoV2373, possibly even later this year.
Thus, between the U.K. and the U.S., Novavax is expected to supply a whopping 160 million doses of its flagship Covid-19 vaccine candidate. Plus, on top of all that, Novavax has agreed to work with Takeda Pharmaceutical (NYSE:TAK) to manufacture and commercialize NVX-CoV2373 in Japan.
Is this too much for Novavax? Only time will tell whether the company can keep up with the intense demand for its Covid-19 vaccine candidate. But if Novavax’s biggest problem is having too many orders, that’s not such a bad problem to have.
Bottom Line on Novavax
Unfortunately, the recent dip in the NVAX stock price probably shook some traders out. If anything, it was a chance to accumulate more shares.
Novavax will be extremely busy in 2020 and 2021, but that should be perfectly fine with the company’s investors. After all, busy company is typically a profitable company, and hopefully that will be the case with Novavax.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
