In the cacophony that was the race to provide a vaccine for the novel coronavirus, a few companies stood out as winners while the rest crawled back into their pits like frightened moles. But contrary to conventional wisdom, you can make the argument that Novavax (NASDAQ:NVAX) is one of the victors. While Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) beat Novavax to the punch, NVAX stock is not dead.
A bar set way too low, you might say? Perhaps. But it’s important to realize that prior to NVAX stock sporting a triple-digit price tag, the underlying company was on life support. In fact, a New York Times article explaining the remarkable turnaround of Novavax stated that before the global health crisis, the vaccine specialize was “on the verge of collapse.”
Today, we’re talking about another verge — the possibility that NVAX stock is on the verge of another breakout move. While the prospects don’t seem too hot, given the myriad obstacles and competitive challenges, you can never say never with this crisis.
One headline in particular might provide a boost for NVAX stock. According to a Reuters report, Japan’s health ministry announced that two people died after receiving Moderna’s Covid-19 vaccine shots “that were among lots later suspended following the discovery of contaminants.”
At time of writing, investigators are seeking the cause of the deaths. In the meantime, Japan has “halted the use of 1.63 million Moderna doses shipped to 863 vaccination centers nationwide, more than a week after the domestic distributor,” Takeda Pharmaceutical (NYSE:TAK), got word about contaminants in some vials.
To be clear, Moderna and Takeda made a statement that they “do not have any evidence that these deaths are caused by the Moderna COVID-19 vaccine.” But let’s be honest — in this environment, the truth doesn’t matter as much as credible sensationalism.
Cynical Catalyst for NVAX Stock Is Short-Term
Amid the Covid-19 pandemic sprouted another outbreak — the wide and swift dissemination of conspiracy theories. From the get-go, many elements on the fringes of ideology cast doubt and aspersions on the crisis itself. This later evolved to an outright misinformation campaign against the vaccines.
Listen to the objections and you’ll find a recurring theme — many vaccination opponents felt that the jobs were researched and developed too quickly. And that has always been a cynical catalyst for NVAX stock. As a manufacturer of subunit vaccines, this approach has a proven track record with the hepatitis B vaccine.
Unfortunately, Novavax couldn’t beat out the messenger-RNA specialists of Pfizer and Moderna in the clinical trial race. However, the latest Moderna controversy could provide a small opening for NVAX stock. Among conspiracy theorists, the top two mRNA players are suspect because of the nucleic acid connection. Despite concerted efforts to explain that mRNA vaccines don’t change a patient’s DNA, the conspiracy folks won’t listen.
Still, the pandemic rages on, infecting people irrespective of their personal beliefs about the SARS-CoV-2 virus. Just as importantly, several so-called anti-vaxxers — including prominent ones — have gotten severely sick with Covid-19. In some cases, they succumbed to the disease. If that’s not a wake-up call, I don’t know what is.
From a longshot investment perspective, it’s possible that anti-vaxxers who are watching their friends and family members suffer from the pandemic may consider taking the Novavax shot. Again, the company is going with a proven approach, which may offer a much more palatable solution for the formerly resistant.
While an intriguing concept, I don’t think you should put too much emphasis on it. The reality is that anti-vax sentiment runs very deep, suggesting that a change of platform isn’t going to do much.
Could Delta Variant Provide Another Boost?
While the conspiracy angle around Moderna’s contamination incident probably won’t do much for NVAX stock, it’s possible that the delta variant could provide another run up in the shares. As I said earlier, never say never.
At the same time, if you’re going to gamble on Novavax, you might want to consider its other non-Covid-related businesses. If the company’s coronavirus jabs are going to positively pan out, the crisis will probably have to worsen in scope and scale. That might happen but it might not. It’s too unpredictable to call.
Therefore, if you see an opportunity with NVAX stock outside of this pandemic, you may want to consider buying some shares. Otherwise, betting on the present calamity is too risky for conservative investors.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.