Shares of Novavax (NASDAQ:NVAX) are trending on reports that the U.S. Food and Drug Administration (FDA) is going to approve the company’s Covid-19 vaccine later today. News of the long-awaited approval comes days after the U.S. government ordered 3.2 million doses of Novavax’s vaccine against the deadly respiratory disease. These positive developments have led NVAX stock to rise 15% in the past five trading sessions to reach more than $70 per share.
However, year-to-date, the Gaithersburg, Maryland-based company’s stock remains down nearly 50%. Repeated delays in the approval of its Covid-19 vaccine shook investor confidence in Novavax.
What Happened With NVAX Stock
Politico is reporting the FDA is set to greenlight Novavax’s two-dose Covid-19 vaccine for use in adults. While this news and the order from the federal government are positive developments, Novavax’s Covid-19 vaccine comes to market late. Two-thirds (67%) of the American population are already fully vaccinated against the respiratory illness, according to the U.S. Centers for Disease Control and Prevention (CDC).
Novavax’s vaccine was viewed to be one of most promising inoculations against Covid-19 — so much so that former President Donald Trump’s administration pre-ordered 110 million doses at a cost of $1.6 billion. But Novavax has endured two years of delays and setbacks in getting FDA approval for its vaccine.
Meanwhile, competing inoculations from Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) beat Novavax to market. However, Novavax’s protein-based vaccine could be used in people who are allergic to components of the messenger RNA vaccines offered by Pfizer and Moderna, or who are concerned about those vaccines’ newer technology.
Why It Matters
The FDA approval is a huge victory and vote of confidence in Novavax. Many analysts and investors had doubted whether the company’s Covid-19 vaccine would ever be approved in the U.S. This is the first vaccine that Novavax has successfully commercialized.
Still, the U.S. might not be the primary market for Novavax’s Covid-19 shot given most of the population is already fully inoculated. Novavax has said in the past it plans to concentrate sales of its vaccine on developing nations that have struggled to secure supplies of Covid-19 shots.
The White House’s purchase of more than three million doses of Novavax’s vaccine also boosts the company’s fortunes. It comes as the U.S. government prepares for an uptick in cases this summer as well as an expected resurgence of Covid-19 during cold and flu season this winter.
The FDA has approved Covid-19 vaccines for people aged six months and older. President Joe Biden’s administration is working on a plan that will make all adults eligible for a booster in an attempt to mitigate the effects of contagious omicron subvariants.
What’s Next for NVAX Stock
While official approval has yet to come from the FDA, NVAX stock is climbing on expectations the company’s Covid-19 vaccine will be cleared for widespread use in short order. This is a positive end to a drawn out process that required Novavax to overcome multiple hurdles on the way to getting its vaccine across the finish line.
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.