Novavax Appears to be Running Out of Options

If memory serves me correctly, the last time I mentioned Novavax (NASDAQ:NVAX) was in November. At the time, I didn’t have much good things to say about it other than the spike higher from international regulatory developments presented an ideal opportunity to consider exiting NVAX stock.

Novavax (NVAX) vaccine for prevention of coronavirus, Covid-19, Sars-Cov-2 in doctors hands in rubber blue gloves
Source: Vladimka production / Shutterstock.com

As someone who has never had a position (neither bullish nor bearish) in Novavax, I hope you took the deal the market was giving you then. Right now, the situation isn’t looking too hot.

Boy, that’s an understatement and a half. Without even analyzing the various rumblings affecting Novavax and other coronavirus vaccine players, you can tell that NVAX stock is in big trouble simply from its technical chart. On a year-to-date basis, shares have plummeted nearly 45%.

Out of the popular publicly traded companies I’ve covered so far in 2022 – not including penny stocks – I believe NVAX is the worst performance offender on a year-to-date basis. I think even when I consider penny stocks, NVAX would still be the worst. While such stats may be arbitrary, the point is that a 41% loss over a three-week period is catastrophic.

Now, since we live in a 10x era of toxic positivity, I’m obligated (I guess) to find the good in NVAX stock. Honestly, I have to go back to an old argument that I touched upon for Ocugen (NASDAQ:OCGN) and that is the scientific provenance of Novavax’s subunit-based approach.

Basically, the idea is that the vaccine hesitant want an inoculation option that has a track record. Such a record could help those who believe in kooky stuff – such as the religion-based mark of the beast conspiracy theories – to get onboard with the science.

However, that’s probably not going to happen.

NVAX Stock Is a Day Late and a Dollar Short

To be clear, Novavax has other potentially viable options that don’t involve appealing to conspiracy theorists. For instance, a November 2021 article by Reuters noted that French health authorities advised the under-30 demographic from taking the Moderna (NASDAQ:MRNA) vaccine due to a potentially higher risk for a very rare complication called myocarditis, a heart disease.

According to cynical contrarians, this dynamic bodes well for NVAX stock. It’s an area that Moderna – one of the leaders in the vaccine race – can’t touch, but Novavax can.

But if you were a true cynic, you would likely arrive to the conclusion that the Reuters report would in fact fuel anti-vaxx conspiracy theories. Never mind that a major news agency like Reuters broadcasting such risks to the public contradicts the deranged thesis that lizard people, in conjunction with the deep state, are distributing vaccines to silently kill people.

No, it’s pure fodder for the conspiracy folks and that’s not going to help NVAX stock one bit.

To me, the evidence is starting to mount that those who are at least somewhat predisposed to getting vaccinated have already been vaccinated. Novavax is simply not going to win hearts and minds at this point.

If evangelicals can lose one of their heroes to the faith to Covid and not spark a broader soul-searching discussion about the separation of church and science, I’m afraid that Novavax and its subunit approach is not going to move the needle for the vaccine resistant. At this point, it might just come down to mitigation damage: hope for pockets of spike-up moves and sell into strength.

Still, if you’re really dead set on HODL-ing (holding on for dear life) NVAX stock, there’s one outside glimmer of “hope.”

The Best Requires the Worst

From what I’ve seen, the scientific consensus about the Covid-19 pandemic is that it will eventually turn endemic: we’ll have seasonal outbreaks of Covid, much like the flu, that are highly transmissible but on balance less lethal. Such a situation would also be bad for NVAX stock because the underlying company may be rendered irrelevant.

However, if a future variant is as contagious as omicron and as deadly as delta, we could have a very serious problem on our hands. At that point, yes, I think you’ll see several people transition (rather quickly perhaps) from anti-vaxxers to pro-vaxxers.

That doesn’t seem to follow the traditional path of infectious diseases. Still, at least one expert voiced the possibility of such a threat occurring. And that’s what we’ll need to see for NVAX stock: its best outcome may depend on the worst outlook for us.

But it doesn’t seem like a probable scenario. Therefore, exiting when you can still seems the most reasonable approach with Novavax.

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.


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