Maryland-based biotech firm Novavax (NASDAQ:NVAX) sometimes feels like an also-ran among Covid-19 vaccine developers. After Pfizer (NYSE:PFE) already delivered the first doses of its vaccine and Moderna (NASDAQ:MRNA) is now doing the same, some traders have ignored NVAX stock.
For humanity’s sake, we should all be perfectly fine with multiple companies developing Covid-19 vaccines. After all, the more vaccines there are on the market, the better the odds are of ending the pandemic.
Still, for investors, it’s important to bet on the strongest competitors. As we’ll explore, Novavax’s Covid-19 vaccine candidate, known as NVX-CoV2373, unfortunately hit a bump in the road.
So, does Novavax’s problems outweigh its potential to finish strongly in the vaccine race? Despite the recent setback, perhaps we can find reasons to still believe in this underappreciated American drug maker.
A Closer Look at NVAX Stock
If you’re not prepared to accept some volatility, then a position in NVAX stock probably isn’t right for you.
We can take Dec. 18 as an example. On that day, the stock dropped more than 5% to land at $124.85. That’s not unusual for this stock, so be prepared for the shares to register big daily moves in both directions.
Also, be advised that Novavax’s trailing 12-month earnings per share is -$5.66. This might be off-putting to some investors, but it doesn’t need to be a deal breaker.
It’s entirely possible that Novavax could generate huge revenues with NVX-CoV2373 at some point. Still, just understand that it requires a measure of faith in the company to confidently invest in NVAX stock.
Pushing Back the Timeline
Without a doubt, it was disappointing for Novavax’s shareholders to learn in late November that the company’s “late-stage” U.S. Covid-19 vaccine trial would be delayed.
To make matters worse, this was the second time it was postponed. Therefore, it’s understandable if the company’s shareholders felt frustrated.
Evidently, this delay was linked to issues in scaling up the manufacturing of the vaccine. At this point, however, the FDA is still likely to approve NVX-CoV2373 at some point.
It’s perfectly normal for drug makers to push back their timelines. That’s something that those who invest in the biotech sector should expect. It will be easier to believe in Novavax once we understand that it’s a dark horse in the vaccine race, as opposed to a more advanced competitor like Pfizer or Moderna.
Novavax Is Still Making Progress
If we’re willing to look beyond America’s borders, we can still see that Novavax is progressing in its quest to obtain regulatory approval for NVX-CoV2373.
For instance, the company is engaged in a Phase 2b trial of NVX-CoV2373 in South Africa. This clinical trial involves more than 4,400 volunteers.
Furthermore, Novavax is running a Phase 3 clinical trial for NVX-CoV2373 involving 15,000 enrolled volunteers in the United Kingdom. Interim data for this trial may be available as soon as the first quarter of 2021.
An additional piece of good news comes from New Zealand, where Novavax signed an advance agreement with the government to supply 10.7 million doses of NVX-CoV2373.
And by the way, as InvestorPlace contributor Josh Enomoto pointed out, NVX-CoV2373 can be stored at normal refrigerated temperatures. This differentiates Novavax’s Covid-19 vaccine candidate from Pfizer’s, which must be stored at -94 degrees Fahrenheit.
The Bottom Line
I’ll grant that it might feel easier to wager on a Covid-19 vaccine front-runner like Pfizer. Still, there could be room for more than one winner in the vaccine race.
Drug makers will face setbacks, and investors shouldn’t abandon a stock with every bump in the road. NVAX stock holders can take comfort in the progress that’s being made with NVX-CoV2373.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
