There’s Good Reason to Believe Novavax Will Rise Soon

An investor who established a position in Novavax (NASDAQ:NVAX) stock early in 2021 has been on quite the roller coaster ride. Let’s start by noting that this fictitious investor would be up about 72% if they had simply held on to their shares. 

Novavax (NVAX) logo surrounded by medical supplies

Source: Ascannio/Shutterstock.com

That would not have been a stress-free endeavor, however. They would have been elated between late January and Feb. 8 as NVAX climbed 140%. Many would have chosen to take profits at that moment. 

But the fictitious investor has simply watched NVAX seesaw up and down for the past 4 months. It looks like shares are trending up right now on two pieces of news which should catalyze an inflow of capital into the stock. 

The first piece of news relates to Novavax’s Phase 3 U.S. trial data. 

NVAX Stock: Trial Data Coming?

Novavax has been keeping investors on the edges of their seats for months waiting for U.S. vaccine data for months. On June 1 the company signaled that data from the Phase 3 trial will soon be released. In an investor conference, management noted that they will be revealing data from the trial shortly. 

Responding to queries regarding the conference Novavax management saidOn our May 10 earnings call, we said that we would announce the Phase 3 PREVENT-19 clinical trial data in the second quarter, which aligns with what was said yesterday.”

The company also stated in early May that it wouldn’t submit the vaccine for regulatory approval until sometime in Q3. At the same time, Jeffries analyst Kelechi Chikere noted that Novavax reaffirmed its intention to produce 100 million monthly doses of vaccine by the end of Q3, and 150 million by the end of Q4 at the latest conference. 

However, the language management used, and the timeline given are all quite indefinite. But the market seems pleased with the news and NVAX stock is trending upward since its release. 

The second piece of news that could send shares higher relates to Covid-19 variants, vaccine mixing and booster shots. 

Variants and Immunity 

There is a possibility that evolving variants of Covid-19 may necessitate booster shots in fully vaccinated people. In order to test this Federal Health authorities launched a study testing the efficacy of mixing vaccines. Health authorities are testing whether these patients could be conferred extra immunity by receiving different vaccines than those which they initially received. 

Dr. Anthony Fauci said “Although the vaccines currently authorized by the U.S. Food and Drug Administration offer strong protection against Covid-19, we need to prepare for the possibility of needing booster shots to counter waning immunity and to keep pace with an evolving virus,”

The initial testing doesn’t include Novavax as it hasn’t received approval yet. Study arms will be mixed and matched among the 3 approved vaccines from Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX), Moderna (NASDAQ:MRNA), and Johnson & Johnson (NYSE:JNJ).  

But the National Institutes of Allergy and Infectious Diseases (NAIAD) said that they may add new vaccines to the trial upon their approval. This bodes well for Novavax as it moves closer to regulatory approval and should serve to push prices up. 

Novavax remains in a similar position financially. It raised $565 million in equity offerings in Q1, and ended the quarter with a cash position of over $2 billion. Yet, the company’s financial results still take a back seat in the argument over whether it is worthy of speculation. The real question remains whether it gets regulatory approval. Then it’s worth considering what that will mean to the top and bottom lines at Novavax. For now, NVAX shares look to be headed north. 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.


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