The second week of 2022 just began with a promising development in the vaccine race. Covid-19 cases caused by the omicron variant are still spiking across the globe. Meanwhile, experts say many countries are still weeks away from their peaks. However, U.S.-based pharmaceutical producer Novavax (NASDAQ:NVAX) may now be on the verge of a significant milestone.
Novavax has had a complicated journey establishing itself among more prominent vaccine stocks, but according to an announcement this morning the company is likely in reach of a major regulatory catalyst. That will certainly provide a significant boost to NVAX stock, if and when it comes to pass.
What’s Happening with NVAX Stock
This morning saw a big announcement from Novavax. Along with its partner, the Serum Institute of India (SII), the company has filed for Emergency Use Authorization (EUA) in South Africa to distribute its vaccine. Specifically, the submission was for Covavax, the company’s “recombinant nanoparticle protein-based Covid-19 vaccine candidate with Matrix-M™ adjuvant.” If the approval is granted, the vaccine will be produced and distributed in South Africa by SII.
Right now, NVAX stock is seeing a lot of turbulence, even following this news. Within the first hour of trading, shares shot up only to plunge back down just as quickly. As of this writing, NVAX stock is currently up about 6%. Still, although its currently rising again, this morning’s patterns don’t inspire much confidence for a smooth upward trajectory. Shares remain in the red by more than 5% for the week and 24% for the month.
Why It Matters
The world received a painful lesson in the consequences of inadequate vaccine distribution back in late November, when the omicron variant first emerged in South Africa and quickly began to spread. Since then, omicron has overtaken the globe, accounting for most new cases. So, it goes without saying that further vaccines are needed — especially in that part of the world. Novavax is intent on beating competitors to this ripe market.
If the company is granted regulatory approval, NVAX stock will definitely shoot up. One thing we’ve learned from the vaccine race is the importance of getting to a market first. Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) have been the clear winners of the first leg of the race after cornering the U.S. vaccine market, but the rise of omicron has given other companies an opportunity to make up ground. As of now, though, much hinges on Novavax gaining its EUA.
What It Means
While it’s easy for pharma and biotech stocks to rise on news that they’ve filed for regulatory approvals, unless they receive those approvals the gains are often short-lived. With that in mind, it’s easy to see why investors might be waiting to celebrate Novavax’s recent announcement.
That said, InvestorPlace’s Louis Navellier recently touted NVAX stock as a vaccine play with plenty of upside despite its market performance of late. Further, InvestorPlace contributor Thomas Niel also speculates that an overseas rollout could be exactly what the stock needs. As of now, the company is heading towards exactly that.
NVAX stock is certainly worth watching for anyone eyeing potential vaccine plays for the year ahead.
On the date of publication, Samuel O’Brient did not hold (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.
