Novavax’s Cinderella Tale is Heading Toward an Alternative Ending

Once one of 2020’s Cinderella stories, Novavax (NASDAQ:NVAX) has tumbled sharply from its August highs. Likely, the realities of the accelerated novel coronavirus vaccine program known as Operation Warp Speed are coming to bite NVAX stock and rivals such as Moderna (NASDAQ:MRNA).


In the best of circumstances, vaccines take years to develop and distribute. Now, they’ve got to do it by January 2021 and if President Trump had his way, before Nov. 3.

So, the news that Novavax reached an agreement in principle with the Canadian government to supply 76 million doses to our northern neighbor was a much-needed relief for recently embattled stakeholders. According to management, Novavax expects to finalize the agreement “as early as the second quarter of 2021.” The deal is contingent on Health Canada’s approval.

In addition, Novavax could potentially ride this momentum higher thanks to the underlying nature of its vaccine candidate. As you know, multiple biotechnology and pharmaceutical firms are part of this unprecedented effort. Not surprisingly, then, there are multiple approaches to solving the novel coronavirus riddle.

Novavax is going with a subunit vaccine design, which could be a brilliant move. Primarily, subunit vaccines only contain the necessary antigens to make the platform work; hence, they don’t have the other molecules that make up the target microbes. This makes subunit vaccines appropriate for those with weakened immune systems, giving NVAX stock an advantage over rivals.

As you know, health officials have consistently warned that people with underlying conditions are at greater risk.

NVAX Stock Narrative May be Losing Its Potency

Although subunit vaccines feature attributes that are superior to other vaccine types, they are not without drawbacks. And that’s one of the reasons why NVAX stock may not be getting a biggest boost from the Canada deal.

First, subunits typically have low immunogenicity, or the ability to induce an immune response, relative to other vaccines. Therefore, subunits may require adjuvants to catalyze a stronger response. According to the Centers for Disease Control and Prevention, adjuvants have been used in vaccines safely for decades.

Nevertheless, the CDC warns that they “can cause more local reactions (such as redness, swelling, and pain at the injection site) and more systemic reactions (such as fever, chills and body aches) than non-adjuvanted vaccines. It’s possible that this can cause issues with mass-scale distribution to immune-compromised individuals, taking some of the sheen off NVAX stock.

Second, multiple doses may be needed for long-term immunity. To be fair, this is a challenge that affects several Covid-19 vaccine candidates. So, it’s not a headwind specific to NVAX stock. But then again, that might be of little concern when vaccine plays have been so disappointing recently.

And because of this disappointment, it may be possible that treatment plays, not vaccines are the best answer right now. Granted, companies like Gilead Sciences (NASDAQ:GILD) have lost most of their pandemic-fueled gains. However, its Remdesivir drug, which is an inhibitor, may offer versatility.

Specifically, Remdesivir affects the enzyme replication process, mimicking an RNA building block to ultimately prevent the replication of the Covid-19 enzyme. At the end of the day, no matter how effective a vaccine is, it won’t do much if a person is already suffering moderate to severe symptoms.

Inhibitors at least provide some time before we produce a more permanent solution.

Trump Doesn’t Need a Vaccine

I’ve mentioned this before but as long as the stock market doesn’t crash, President Trump has a very good chance of reelection. I know that sounds shocking to my liberal friends and readers. However, you’ve got to understand that the American people think with their stomachs, not with their heads.

You want to know why America has an obesity crisis? Like I said, we collectively think with our stomachs. Everything is binary in this context: hungry or not hungry. That’s it. No nuance whatsoever.

According to a July 30 Pew Research Center report, 73% of Americans have an unfavorable view of China. That’s an all-time high by a country mile. Therefore, all President Trump needs to do is blame the Chinese and by doing so, convey a racial danger message to non-Asian voters. It’s sickening but this is the kind of message that will stick in non-Asian communities of color, which have been disproportionately negatively affected by the coronavirus.

So, Trump may prance around and claim he wants a vaccine before election day. The truth is, he doesn’t need it and he knows it. Politically, that’s not great news for NVAX stock.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. 

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