On Oct. 2, U.S. President posted a tweet that will go down in history. He and his wife tested positive for the novel coronavirus. This unexpected turn of events will surely have an impact on Covid-19 vaccine specialists like Novavax (NASDAQ:NVAX). Therefore, current and prospective NVAX stock holders should watch closely for further developments and adjust their strategies accordingly.
The timing of Trump’s announcement might or might not help his chances of reelection. For Novavax, however, the timing could be of great benefit to the company.
After all, the NVAX stock price has pulled back sharply since its peak in August. The company and the shareholders needed a catalyst. No reasonable person wants to see the president of the United States get sick, but this event will undoubtedly add fuel to the Covid-19 vaccine race.
As the White House enters into a code red moment, speculative traders ought to take a closer look at NVAX stock. Novavax isn’t necessarily in the lead when it comes to Covid-19 vaccine development. Yet, it’s a strong contender and you can own the shares at a more reasonable price point now.
A Closer Look at NVAX Stock
So, let’s start with an examination of the NVAX stock price in 2020. Believe it or not, NVAX shares traded below $5 at the beginning of the year. That would classify it, at the time, as a penny stock according to the guidelines of the U.S. Securities and Exchange Commission.
Needless to say, NVAX isn’t a penny stock anymore. As a clinical-stage developer of a Covid-19 vaccine candidate, NVX-CoV2373, Novavax was bound to benefit from the intense demand for a vaccine as the coronavirus spread in the United States.
Early shareholders benefited, as well. In August, NVAX stock attained a stunning 52-week high of $189.40. That’s an incredible journey from NVAX’s 52-week low price of $3.54.
Valuations-related concerns are understandable in light of this astounding share-price run-up. However, those concerned should be allayed now as the NVAX stock price retreated to $103.60 by Oct. 3. That signifies a sizable discount, so dip buyers might consider starting or adding to their positions now.
Breaking Down the Science
I’m definitely not an expert in science or medicine. Therefore, I looked to my fellow InvestorPlace contributor Chris Markoch for a succinct explanation of what separates Novavax’s Covid-19 vaccine candidate from those of competitors like Moderna (NASDAQ:MRNA) and Johnson & Johnson (NYSE:JNJ).
Thankfully, Markoch is a writer par excellence and he skillfully broke down the evident advantages of Novavax’s approach, which involves developing a “subunit” vaccine:
“In this approach protein fragments (subunits) of the virus get injected into the patient… Theoretically, it should be extremely safe. And Novavax claims its vaccine can be stored at refrigerator temperatures. This is an advantage over other candidates that have to be stored in sub-zero temperatures.”
I really like the focus on safety when it comes to NVX-CoV2373. During the Phase 1 clinical trials, Novavax’s vaccine candidate was reportedly well tolerated. Moreover, no severe adverse events were reported.
With the coronavirus impacting the president and first lady, the nation will understandably want Operation Warp Speed to go into overdrive. But speed isn’t everything here as safety should be strongly considered in any potential large-scale vaccine rollout.
Fortunately, Novavax is moving at warp speed with NVX-CoV2373 but is also focusing on safety. The company’s Phase 3 trials are already in progress for this vaccine candidate.
In these trials, as many as 10,000 volunteers will help to determine whether NVX-CoV2373 is not only effective in preventing the spread of Covid-19, but safe for mega-scale human use.
The Bottom Line
Currently at a more reasonable price point, NVAX stock is a better deal that it was in August.
And with the company moving forward quickly but cautiously with its clinical trials, the shareholders can feel good about Novavax’s progress during this time of crisis.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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.