Editor’s note: This article was updated on Sept. 29 to clarify the type of Covid-19 vaccine that Novavax (NASDAQ:NVAX) is developing.
Today, investors in Novavax (NASDAQ:NVAX) are seeing a lot of red. Indeed, shares of NVAX stock have sunk more than 10% today on heavier-than-usual volume.
This move comes amid some rather impressive upside momentum for this stock over the past couple years. Indeed, over the past year alone, NVAX stock has been a double-up for investors who have looked to ride vaccine-related stocks higher. That’s including today’s double-digit drop.
Indeed, it appears the market is pricing a couple key factors into the share price of Novavax and its vaccine-related peers. We’ll get to those in a second.
But looking at the broader market volatility today, it’s clear that risk-off sentiment is taking hold. Rising treasury yields have rained on the parade of growth investors from time to time this year. Today, the 10-year yield and two-year yield reached three-year and 18-month highs. That’s significant for those discounting future cash flows, particularly those further out.
Accordingly, with market sentiment appearing bearish, perhaps it’s unsurprising to see high-growth stocks take a breather. That said, a 10% decline in any stock is worth diving into. Here are a couple of sector-specific catalysts that appear to be driving NVAX lower today.
NVAX Stock Lower on Diminishing Sentiment Among Vaccine Players
Today, a number of reports are highlighting the potential for Covid-19 vaccine stocks to see a less impressive run than what was previously expected. Based on recent comments from Pfizer (NYSE:PFE) CEO Albert Bourla, it appears the runway for vaccine stocks may be shorter than expected. Mr. Bourla said he expects post-pandemic life to begin within a year. That’s a relatively short time frame for those expecting continuous boosters for many years to come.
CEOs of other major biotech companies have echoed this sentiment, to varying degrees. Accordingly, there’s some concern that earlier-stage vaccine makers such as Novavax may have an uphill battle to gain market share, given the potential for the market to diminish greatly within a year.
This sentiment has been further cemented by recent news that Sanofi has dropped plans to develop its own mRNA vaccine due to the success Pfizer and Moderna (NASDAQ:MRNA) have seen in this regard. For Novavax, this is not a good sign.
Indeed, that’s not to say that this pandemic can’t last forever, or that Novavax’s efficacy may prove to be among the best of its peers. However, first-mover advantages matter in certain cases. And with an uncertain timeline for how this pandemic will progress (or hopefully end), NVAX stock is on the out today.
On the date of publication, Chris MacDonald 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.