Novavax Stock Will Find Its Bottom, But Probably not Soon

Things are going from bad to worse for pharmaceutical company Novavax (NASDAQ:NVAX). Down nearly 40% over the past month, NVAX stock has been on a steep decline that appears to be accelerating.

Novavax (NVAX) logo surrounded by medical supplies
Source: Ascannio/Shutterstock.com

At its current price of $163.06 per share, Novavax’s stock is now 50% below its February all-time high of $331.68.

With the current slide showing no signs of stopping, shareholders may want to cut their losses now before the company’s stock falls off a cliff and any lingering gains are completely wiped out.

Short of an unexpected breakthrough, it doesn’t look like Novavax’s share price will recover anytime soon.

Shares have declined as it has become apparent that Novavax’s long-awaited Covid-19 vaccine may not come to market as intended. As we enter the final innings of the global pandemic, Novavax’s Covid-19 vaccine has yet to receive “Emergency Use Authorization” from the U.S. Food and Drug Administration (FDA).

This, at a time when the world is moving beyond the initial vaccination push and focusing on booster shots and the development of pills to counter the effects of the respiratory disease.

News that pharmaceutical giant Merck & Co. (NYSE:MRK) is developing a pill against Covid-19 that can be taken orally has sent the stocks of several vaccine manufacturers lower, notably Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE).

However, those companies have already benefitted greatly from the fact that their Covid-19 vaccines have achieved FDA approval and been distributed worldwide. Novavax’s vaccine hasn’t even made it to the starting line yet. In short, Novavax appears to have missed the Covid-19 vaccine boat.

NVAX and the EUA

Novavax had planned to have Emergency Use Authorization (EUA) for its Covid-19 vaccine locked up in May of this year.

However, several internal delays have the company now pledging to apply for EUA with the FDA by the end of this year, although an exact date has not been given.

With leading health experts and public policy think tanks forecasting that the acute phase of the pandemic will likely be over next summer (2022), Novavax looks very late to the vaccine party.

Novavax’s entire future is wrapped up in the company successfully bringing to market its NVX-CoV2373 coronavirus vaccine candidate. Beyond the Covid-19 vaccine, Novavax’s pipeline is extremely thin and consists mainly of an experimental drug to treat Ebola.

In an effort to regroup and kick development of its Covid-19 vaccine into high gear, Novavax recently announced a number of senior management changes.

The company announced new executives in the key roles of chief financial officer, chief safety officer, and head of global vaccine safety. Many of the senior positions are being filled by experienced pharmaceutical veterans who previously worked at companies such as Johnson & Johnson (NYSE:JNJ).

While Novavax did its best to hype the management changes, investors treated the shake-up as akin to shuffling the deck chairs aboard the Titanic.

NVAX stock fell 5% immediately after the new executive positions were announced publicly. At this point, it seems that there are few catalysts likely to spark a recovery in Novavax stock aside from FDA approval of the company’s Covid-19 vaccine.

Let NVAX Stock Bottom

Novavax’s stock enjoyed a spectacular run when the company was a leading candidate to develop a vaccine against Covid-19.

However, Novavax has not just fallen behind in the race to bring a treatment for Covid-19 to market, it has effectively fallen out of the race.

The company’s share price is being punished as a result. Down 40% in a month, and with no end to the decline in sight, investors should sit on the sidelines for the time being.

Wait until it is clear that Novavax has bottomed before considering a position in the pharmaceutical company. NVAX stock is not a buy.

Disclosure: On the date of publication, Joel Baglole 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.


Article printed from InvestorPlace Media, https://investorplace.com/2021/10/nvax-stock-will-find-its-bottom-but-probably-not-soon/.

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