Government Support Puts Novavax on a Faster Path to Success

To be honest, I was off-base in my recent assessment of biotechnology company Novavax (NASDAQ:NVAX). At that time, I had a bad feeling that NVAX stock had peaked.

Novavax (NVAX) logo surrounded by medical supplies

Source: Ascannio/Shutterstock.com

My concern was related to an event which was revealed on July 26. In Australia, 51 million doses of Novavax’s Covid-19 vaccine were originally supposed to arrive in the second half of this year.

However, it was subsequently reported that the vaccine rollout was not expected until sometime in 2022. That just goes to show that getting a vaccine into the arms of the people isn’t an easy task.

Now, however, I’m ready to become bullish on Novavax. As the company continues to target Covid-19 (including the Delta variant), progress on the regulatory front should provide the owners of NVAX stock with some encouragement.

A Closer Look at NVAX Stock

I remember the good old days, back in 2019 when the shares could be purchased for just $5 each. Those days are long gone.

Astoundingly, on Feb. 8, 2021,  Novavax’s shares reached a 52-week high of $331.68, and they closed a bit above $250 last Friday. So, as you can see, today it will take hundreds of dollars just to buy a single share.

How did NVAX stock get so pricey? I suspect its huge rally wasn’t just due to the onset of Covid-19.

Keep in mind that in early 2021, meme stock mania was in full effect. Reddit users were unexpectedly pumping various stocks at that time.

I can’t prove it, but social media traders might have helped to push up NVAX stock. The February peak was followed by a sharp drop, but the stock appears to be making a comeback in September.

Hopefully, this time around, the buyers can move the share price up based on positive, company-specific news, instead of meme stock mania.

New CDC Guidance

Regulatory approval, or progress towards that objective, can be a make-or-break scenario for biotechnology companies like Novavax.

Positive news on that front came from Novavax on Aug. 30, as it revealed updated guidance from the U.S. Centers for Disease Control and Prevention (CDC) concerning people who have been vaccinated in clinical trials in the U.S.

You can read the full statement issued by the CDC here. However, Novavax’s summary is easier to understand:

“The CDC guidance states that participants in the Novavax PREVENT-19 Phase 3 clinical trial meet the criteria to be considered fully vaccinated two weeks after they have completed the vaccine series.”

That is exciting, but let’s not jump to the wrong conclusion

The CDC cautioned, “This does not imply that the vaccine has been authorized by FDA or is recommended by CDC or ACIP [Advisory Committee on Immunization Practices].”

It Gets Even Better

As the old saying goes, when it rains, it pours. That’s sometimes said about bad news, but it can also apply to good news.

Apparently, the good news is pouring in for Novavax and the company’s stakeholders lately.

That’s because the company reportedly plans to initiate a Phase 1/2 clinical study evaluating not just one, but three Covid-19 vaccine constructs.

To be more precise, these constructs will use the Matrix-M1 adjuvant to target the Covid-19 Beta and Delta variants.

As of the afternoon of Sept. 2, Novavax evidently hadn’t yet included this information on its list of press releases. So investors should keep an eye out for that.

In any case, it’s great that Novavax is aggressively targeting multiple variants of Covid-19.

The company’s Phase 1/2 study is expected to commence on Oct. 4 and should continue through June of 2022.

The Bottom Line

Is seems like NVAX stock is fated to break above its February peak and then move higher from there.

There’s no guarantee that this will happen, of course.

Still, there’s certainly enough positive news from Novavax lately to keep its shareholders motivated and optimistic for the time being.

On the date of publication, David Moadel 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.


Article printed from InvestorPlace Media, https://investorplace.com/2021/09/government-support-puts-nvax-stock-holders-on-faster-path-to-success/.

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