Vaccines Aren’t Winner-Take-All, Making Novavax Stock a Smart Covid Play

The novel coronavirus vaccine sweepstakes are getting more interesting, as two major companies see very encouraging results from recent trials. Novavax (NASDAQ:NVAX) is not one of those firms. Which means investors who bought NVAX stock may be wondering if it is time to sell their shares.

Novavax (NVAX) logo surrounded by medical supplies
Source: Ascannio/Shutterstock.com

It’s a good question to ask.

The answer hinges on the motivation behind buying NVAX stock in the first place.

One thing is certain. Don’t approach this decision emotionally. Leave those emotions at the door and evaluate the circumstances with cool deliberation.

The Competition and NVAX Stock

There was some good news in recent days regarding the Covid-19 pandemic.

Biotech company Moderna (NASDAQ:MRNA) on Nov. 16 said its Covid-19 vaccine candidate mRNA-1273 showed a 94.5% effectiveness. Moderna’s announcement came about one week after another biotech, Pfizer (NYSE:PFE), announced vaccine candidate BNT-162b2, which was developed in partnership with Germany’s BioNTech (NASDAQ:BNTX), showed a 90% effectiveness.

The two experimental vaccines use a similar strategy to combat the coronavirus. Messenger RNA is modified to trigger an immune response to a key protein in the virus.

Also, both vaccines pose distribution and storage challenges as they have to be kept frozen, especially Pfizer’s candidate (minus 94 degrees F). Moderna’s, on other hand, can be stored at normal freezer temperatures and even is viable for up to 12 hours at room temperature.

Both candidates await review by federal regulators. Upon approval, it will be months before they would be widely available.

Nevertheless, the apparent success of these vaccine candidates is welcome news indeed for a nation where Covid-19 is raging seemingly unchecked and where effective steps to reduce its spread are criticized by short-sighted politicians.

Novavax Takes a Different Route

Novavax is a smaller company working to catch up to its larger competitors.

Its vaccine candidate NVX-CoV2373 recently began a Phase 3 trial in the United Kingdom with 10,000 participants. Interim results are anticipated early next year. Meanwhile, a similar trial in the United States could start before year’s end.

In addition, it is worth noting a major difference in these vaccine candidates. The Novavax vaccine does not require the strict frozen-storage practices that are necessary to preserve both the Moderna and Pfizer vaccines. The Novavax vaccine requires more normal refrigeration. This will make distribution and storage much easier and less expensive.

Novavax describes its vaccine candidate as “a stable, prefusion protein using Novavax’ recombinant protein nanoparticle technology” that can be distributed via “standard vaccine channels.” The vaccine is designed to generate an immune response and antibodies to combat the virus.

Clearly, the company’s product has distinct advantages if it proves to be effective.

What About NVAX Stock?

The start of the British Phase 3 trial in late September was a positive development for NVAX stock. Writing in InvestorPlace on Oct. 1, I said that kind of progress kept Novavax relevant and that investors should consider buying more than one vaccine contender to spread the risk.

I haven’t changed my mind, even in light of the headline-grabbing announcements by Pfizer and Moderna.

Novavax appears intent on not getting too far behind. The company should have preliminary results from the British trial soon and a Phase 3 trial going in the U.S. in early 2021. Unless researchers encounter negative results, the company should remain a serious contender in getting government approvals for a vaccine to combat Covid-19.

As the trials are underway, Novavax took two crucial steps. First, company officials finalized arrangements for the components of its vaccine. The second was making the preparations necessary to manufacture 2 billion doses of the NVX-CoV2373 vaccine per year.

Novavax appears to be acting prudently in this effort. And remember, developing vaccines to control the Covid-19 pandemic is not a winner-take-all proposition. Several effective vaccines likely will be needed on a global scale.

Owners of NVAX stock stand to benefit if the company’s alternative vaccine proves successful in formal testing. Stay the course and stay informed.

On the date of publication, Larry Sullivan did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.

Larry Sullivan is a veteran journalist in Florida who has covered banking and finance for several years. He is a former investing editor at U.S. News & World Report in Washington D.C.


Article printed from InvestorPlace Media, https://investorplace.com/2020/11/nvax-stock-a-smart-covid-play/.

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