As markets opened today, the vaccine industry is faced with a bleak landscape. Yesterday, the U.S. Supreme Court (USSC) blocked the vaccine mandate proposed by President Joe Biden’s administration. With the policy that would have required vaccinations or testing for all large businesses shot down, vaccine producers face an uncertain future. While the USSC did grant approval to another mandate, one requiring vaccines for healthcare workers at federally funded facilities, it affects a significantly smaller group. As a result, the vaccine stocks that were rising only a few weeks ago are now in free fall, including Novavax (NASDAQ:NVAX). As NVAX stock continues to decline, bears continue to eye it. And this time, they are not without reason.
What’s Happening With NVAX Stock
Within the first hour of trading today, NVAX stock shot up, only to plunge back down. As of this writing, its declines are just shy of 2% for the morning. This performance continues the pattern that the stock has shown for the latter half of this week. Beginning to slip yesterday, it is currently in the red by more than 12% for the week and more than 34% for the month.
The recent bad news for vaccine producers isn’t pushing only NVAX stock down. This morning has seen early vaccine race winners Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) slip further into the red. Germany’s BioNTech SE (NASDAQ:BNTX) is following suit. However, there may be more reasons for Novavax to be worried about the future of its industry than for its better established competitors.
Why It Matters
It’s no secret that vaccine producers would have strongly benefitted from Biden’s proposed mandate. Now, with the mandate seemingly dead in the water, they face an uncertain future. Even as cases continue to spike across the country due to the omicron variant, experts are casting an eye toward the virus’ peak. And even with child hospitalizations surging, vaccinations of children are stalling. Any way we spin it, it’s clear that vaccine race is losing steam.
For Novavax, the new virus wave brought on by the omicron variant represented a new hope. The smaller biotech producer missed its chance to secure a piece of the vaccine market during the race of spring 2021. However, as the market clearly stalls, it’s unlikely that the company will make any progress in the U.S.
Wall Street already seems to be taking note of the company’s uncertain future. InvestorPlace contributor Chris MacDonald notes that, “Accordingly, investors appear to be taking an increasingly bearish stance on NVAX stock.”
They have plenty of reason to do so. The company’s chance at establishing itself as a key player in the U.S. vaccine race is likely gone. And while the company has gained approval in several other countries, it hasn’t been enough to help NVAX stock overcome the negative energy caused by today’s market momentum. And as InvestorPlace contributor Chris Tyler speculates, the company’s consistent absence from breaking news isn’t doing the stock any favors.
What It Means
Not so long ago, NVAX stock looked promising. As we’re seeing, though, tides can shift quickly. When the demand upon which a company was relying suddenly disappears, it’s hard to be optimistic. Novavax would have had to gain a share in the U.S. market to achieve the type of growth its bulls were looking for.
All that said, a bullish play on vaccine stocks may not be wise right now. With the mandate failed, our presidential administration is likely to focus more on testing.
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.