Covid-19 cases are decreasing across the U.S. and parts of Europe, but for the nations still struggling to gain access to vaccines, a recent setback in production means further bad news. Maryland-based Novavax (NASDAQ:NVAX) seemed to be making progress in the race to produce a successful vaccine, but recent reports have indicated that the company is having trouble meeting the standards of regulatory agencies. Shares of NVAX stock have been plunging since the news broke.
What’s Happening With NVAX Stock
Yesterday evening, POLITICO reported that two sources who were familiar with Novavax’s production process stated that the company was struggling not just to reach the 90% purity level needed for approval for a vaccine, but to come close to it. According to one source, these levels have hovered around 70%.
Shares of NVAX stock were quick to plunge today in response to the news. As of this writing, they are down more than 9% for the morning. Currently trading at $146, shares had mostly hovered between $160-$170 during the previous week. Collectively, the stock is down almost 40% for the month.
September brought some good news for shareholders, as Novavax announced a partnership with a Japanese pharmaceutical giant that promised to help bring company’s formula to supply vaccines to a large international market. More recently, though, the company has been plagued by volatility as investors have sought answers regarding vaccine progress.
What It Means
This news from Novavax is disappointing for multiple reasons. While it indicates that investors aren’t likely to see any major gains unless the company delivers a breakthrough, it will also be harder to trust Novavax moving forward. It’s never a reassuring feeling for investors when they have to hear news from a company by way of a whistleblower.
Plus, there are many other companies working around the clock to get their vaccines and vaccine platforms to market, such as Ginkgo Bioworks (NYSE:DNA) and Vaxart (NASDAQ:VXRT).
Why It Matters
Last week, InvestorPlace’s Joel Baglole claimed that Novavax had fallen out of the vaccine race. That’s looking more prescient now that the public has learned just how much the company is struggling.
This development is disappointing but shouldn’t be unexpected. Novavax has experienced other supply-chain issues that have hindered its large-scale supply deals. For instance, it has had to delay ramping up its per-month production of doses due to a variety of supply constraints.
With other companies outpacing Novavax, there are better opportunities to be bullish in the vaccine stocks space.
On the date of publication, Samuel O’Brient 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.
