Novavax (NASDAQ:NVAX) was hit hard by sluggish vaccine deliveries and delayed regulatory approvals. NVAX stock is down more than 3% today and retreated nearly 50% year-to-date. The biotech traded range-bound for the past month, corresponding to an accumulation or distribution pattern, met before a significant price move. NVAX has a strong pipeline of Phase 3 vaccine candidates. It also offers a differentiated Covid-19 answer, with its protein-based (NVX-CoV2373) vaccine.
The biotech firm underdelivered in the past quarter, but recent developments show that this weakness might be behind us.
Global Covid-19 cases topped 491 million, according to John Hopkins University. The number of global infections decelerated over the past three weeks, the World Health Organization (WHO) shows. In addition, demand for Covid-19 vaccines has already peaked in Western countries, but there is still spare room for new entrants. So far 66.2% of the global population has received at least one vaccine dose. Besides, the world is not immune to new variants. Early data from the closely watched XE variant, recombination of omicron (BA.1) and “stealth” omicron (BA.2) stains, suggests that it might be more contagious than omicron. If this proves correct, Covid-19 vaccine manufacturers will get another boost, which will benefit NVAX shares.
Manufacturing, logistics, and approval delays have been a nightmare for NVAX shareholders. Recently, NVAX solidified its supply logistics, after partnering with the Serum Institute of India. The long-delayed vaccine option is now set to hit the market. Novavax announced vaccine shipments in Canada, Europe, and New Zealand, showing that delivery deferrals might now be behind us. More importantly, NVAX has pilled up approval requests around the globe and most of them have been encountered positively. With over 12 regulatory authorizations already in place, the company is close to receiving the much-awaited Food and Drug Administration (FDA) approval, which should provide a vigorous bullish catalyst for NVAX shares in the near term.
NVAX’s Covid-19 vaccine offers a alternative option compared to other messenger RNA (mRNA) shots. It is the first protein-based vaccine with material benefits compared to peers. First, the shot might get a broader acceptance from vaccine-hesitant individuals, because protein-based shots have been around for decades. Second, Novavax vaccines need less rigid transportation and storage requirements, making them ideal for low-income countries, accounting for the lowest global vaccination rates.
The consolidation of NVAX stock has been painful for investors due to unkept delivery promises and long-delayed vaccine approvals. Nevertheless, the worst seems to be behind NVAX stock, and there are more opportunities than risks going forward.
On the date of publication, Cristian Docan 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.
