A novel coronavirus vaccine was perhaps the most in-demand item throughout 2020. As the world eagerly awaits these vaccines, the market opportunity for the companies that produce them has proven exponential. In this case, even the third or fourth finisher has a lot to gain. Novavax (NASDAQ:NVAX) may not be at the top as a U.S. coronavirus vaccine candidate, but it is not far behind. That means NVAX stock should still be on your radar if you’re looking for more “coronavirus plays.”
NVX-CoV2373 is the only nanoparticle vaccine out of the Phase 3 entrants. The nanoparticles are what makes Novavax’s vaccine unique. This design marks a drastic leap forward from the other vaccines that simply weaken the viruses to build immunity.
Using nanoparticles, the company’s vaccine works more like a virus killer with miniaturized precision. This unique element enhances its potential to treat respiratory viruses.
Examining NVAX Stock and Its Vaccine
The company will begin the U.S. late-stage study of the vaccine NVX-CoV2373 in the next couple of weeks. If everything goes as planned, Novavax could win emergency use authorization and approvals for the vaccine in multiple countries in early 2021. On Nov. 30, the company provided an update on the vaccine. It has more than 20,000 participants dosed so far and it has completed the enrollment of 15,000 participants in the Phase 3 U.K. trial. There is a Phase 2b trial ongoing in South Africa with 4,422 volunteers. It also expects the Phase 3 trial to begin in the coming weeks in Mexico and the U.S.
The company is already making notable moves. Operation Warp Speed has paid $1.6 billion for 100 million doses of the vaccine, which is $16 per dose. That’s a strong starting point. Further, the company has agreements to manufacture more than 2 billion doses. Even at a starting point of $16, the potential revenue could be extremely high. NVAX has an agreement with the Serum Institute of India boosting the capacity to as high as 2 billion doses a year from mid-2021.
To top it all off, nobody knows if a vaccine is a one-time event or if there will be recurring shots.
I consider NVAX stock a good buy for two reasons. One, the clinical setback of AstraZeneca (NASDAQ:AZN) could mean hundreds of millions of additional vaccine sales for Novavax. Second, there is a clear possibility the company could get its third vaccine approval in the U.S. The results of an ongoing trial are slated for the first quarter of 2021, and the company could get an Emergency Use Authorization by the middle of 2021.
A ‘Combo Vaccine’ Would Add to the Bullish Case
Moving past its Covid-19 vaccine, the company is also expected to file approval for the flu vaccine candidate NanoFlu next year. It could become a huge product for the company and NVAX stock will have more room to run in the coming years if does. NanoFlu is in the clinical trial phase. Phase 3 data showed that the product was better than Fluzone.
This vaccine might have to be taken every year, just like any other vaccine and this demonstrates long-term revenue potential. Additionally, the company said that it was possible to combine the flu vaccine with the coronavirus candidate vaccine if approved. This means there could be one vaccine for both.
The potential combination can disrupt the vaccine market. Novavax is the only company leading for a combination vaccine. InvestorPlace contributor Lou Carlozo is optimistic about NVAX’s prospects, citing numerous reasons why the stock remains an outstanding bet.
At the first glance, you might notice that its rivals are moving faster, but this is not a race to the finish line. Global demand for Covid-19 vaccines will be huge. With that demand, different needs will arise. The company is a strong candidate with the potential for reaching this massive vaccine market. Even if you consider the competition, there will be enough space for multiple winners. Considering the health crises across the world, governments will remain more vigilant, even after the primary concern dissipates and the demand for vaccines will continue in the future.
All of these realities add up to make NVAX stock a strong play on the novel coronavirus despite it not being “first” to finish in the race.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article.
