Investors are running out of patience with Novavax (NASDAQ:NVAX) and the other COVID-19 vaccine stocks. The value of NVAX stock has plunged nearly 12% since Sept. 23, while the average NASDAQ index stock is down just 2.3%.
There is concern about future demand as the latest wave of infection declines. Investors worry that the pandemic could be over in 2022, and what then?
That would be especially bad news for Novavax, which has yet to apply for an Emergency Use Authorization (EUA) in the U.S. While Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) have many other drugs in development, Novavax is a vaccine specialist. The COVID-19 vaccine is its one shot at success.
NVAX Stock Is Covid-19 Ultimate
I have been covering NVAX stock, off and on since the pandemic started. Novavax is the ultimate COVID-19 stock.
It won early development funding from the Coalition for Epidemic Preparedness Innovations. Despite missing revenue estimates, the stock was a 10-bagger for investors, going from under $10 a share in March 2020 to over $100 a share in December.
The road has been rockier in 2021. Shares hit an all-time high in February of nearly $300 a share. They have since bounced around above-and-below the $200 mark. At its Sept. 29 price Novavax has a market cap of over $15 billion on estimated 2021 revenues of $1.1 billion.
Thus, the continuing global pandemic is important for investor confidence. If the company can get its manufacturing operations up-and-running, it could equalize access to vaccines. That’s because the Novavax vaccine is protein based and only needs refrigeration. It also contains an adjuvant, Matrix-M, which should mean a lower vaccine dose.
In early trials, the Novavax vaccine has delivered similar protection to those based on Messenger RNA (MRNA), with fewer side effects.
My most recent piece on Novavax was written on Sept. 21 but didn’t appear until Sept. 28. Shares fell in price by nearly 10% between my writing the piece and its publication. Good editing takes time.
The stock was riding high on its application for an Emergency Use Authorization (EUA) from the World Health Organization. At the time, I called this an end run around Novavax’ western critics. Professional stock pickers like our Louis Navellier believed Novavax could still be a winner.
The catalyst for the falling stock price was optimism from Pfizer and Moderna executives that “normal life” could resume next year. That may be true in the U.S., a market where the MRNA vaccines are readily available. It’s not necessarily so in the rest of the world, which remains largely unvaccinated.
The question is how high will vaccine rates be if the level of urgency falls? Right now, that’s all speculative.
Nothing but Speculation
I have gone back-and-forth in my views on Novavax, following the volatility. I have never called it anything other than a speculation.
For speculators, timing is everything. Those who jump in on good news and sell quickly on bad news do very well.
I am not a speculator. I’m a journalist. My goal is to find stories investors can buy today and hold with confidence. I recommended Moderna at the time of its IPO and even bought some shares.
I have never owned, nor shorted, Novavax. What I have done is wish them well and caution against their track record and continuing delays. You can make money on this stock, but only if you stay on top of it.
On the date of publication, Dana Blankenhorn held long positions in MRNA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future available at the Amazon Kindle store. Write him at firstname.lastname@example.org or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.