Is Novavax (NASDAQ:NVAX) cursed? That’s the headline-grabbing narrative that InvestorPlace contributor Will Ashworth went with when describing prospects for NVAX stock. Although I’ve long held personal hopes that the underlying company would do well in the vaccination race against the novel coronavirus, circumstances don’t look too favorable for this Cinderella tale of the biotechnology industry.
As my colleague stated, Merck (NYSE:MRK) “reported on Sept. 29 that its experimental Covid-19 oral antiviral drug, molnupiravir, could be very effective against different variants of the virus, including the Delta variant.” Other analysts have reasoned that this could be the nail in the coffin for NVAX stock. While I need to be measured in my tone, it’s difficult not to have ominous feelings for Novavax’s prospects.
Starting from the early days of the public health crisis, conspiracy theories had already begun blossoming about the “true” motivation behind the so-called “plandemic.” Nobody who has had their pulse on popular culture should be surprised by any of this.
Back in November of 2019 — mere weeks before the first Covid-19 cases occurred in China — CNN published an article noting that flat-earth conspiracies are “spreading around the globe.” You want to talk conspiracies? That, my friends, is fortuitous timing.
Anyway, when you have an alarmingly large group of people who believe that world governments and tech billionaires are conspiring to keep the shape of our planet a secret from everyone, Covid vaccine hesitancy is truly the least resistive of downwind catalysts you can find.
And that brings me to NVAX stock. As I and others have stated, Novavax’s solution is based on the subunit approach, which is a proven one. Subunit vaccines use a small part of a pathogen to train the immune system to fight off future infection.
So, those who state that Covid vaccines were rushed should have no science-backed objections with the Novavax jab. But an oral antiviral treatment might change everything.
NVAX Stock Sees the Clock Ticking
For antivaxxers — arguably most of whom hold politically conservative views — they’re taking quite a gamble that their point of view is the correct one. If they’re wrong, they’ll suffer the consequences. And if they also happen to be conservative, then they know they’re not going to attract much empathy.
After all, Republicans (and libertarians to a large extent) marketed themselves as the party of personal responsibility.
The above thought process surely convinced some with extreme alternative views to cross over into mainstream scientific understanding. Certainly, the fear of the unknown is a powerful thing. Better yet for NVAX stock, its underlying vaccine is based on science that anybody can trust.
However, the massive problem for Novavax and other vaccine developers is Merck’s oral drug molnupiravir. If it’s good as advertised, antivaxxers can have their cake and eat it too. Meaning that following a tightly packed Trump rally, should an antivaxxer come down with Covid-19, Merck can provide such individuals with both a physical and ideological out.
Granted, the antivaxxer component is a small angle to exploit for the benefit of NVAX stock. Still, whatever benefit that would have been accrued goes out the window with molnupiravir.
Also, the greater challenge for Novavax is that subunit vaccines are comparatively difficult to manufacture. That’s part of the reason why Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA), with their messenger-RNA vaccines, beat Novavax to the punch. As Harvard Health Publishing pointed out, mRNA vaccines are essentially more efficient to develop, cutting down the time required relative to other proven approaches getting something to the table.
For all the huffing and puffing that vaccine companies utilizing alternative approaches exerted, one pill could render those efforts obsolete — at least as far as Covid-19 is concerned.
Time to Consider Closing Out
Don’t take any of the above as a criticism of NVAX stock. The underlying company shot up like a phoenix, becoming one of the biggest turnaround stories in recent memory. If you had bought shares early into this crisis, you’re still doing very well.
However, it might be time to consider trimming your position in light of the Merck development. Sure, Novavax might have other products in the pipeline. But the bulk of the premium associated with NVAX stock was based on its credible angle on Covid-19. Without that, I’m not sure if shares can maintain their lofty position.
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.