Novavax (NASDAQ:NVAX) stock is up 6% today after the U.S. Centers for Disease Control and Prevention (CDC) approved its two-dose Covid-19 vaccine for use in adults.
The CDC approval paves the way for Novavax to begin commercial sales of its long delayed Covid-19 vaccine in the U.S. This is an extremely positive development for the Gaithersburg, Maryland-based biotech company. Novavax has struggled with repeated delays regarding regulatory approval of its shot against the highly contagious respiratory disease.
Today’s gains bring the increase in NVAX stock to 48% over the past month. These gains come as it became clear that the company’s Covid-19 vaccine would receive approval for widespread use in America. The vaccine has already been approved in Canada and throughout Europe. However, year-to-date, Novavax’s stock is still down 58% and trading at $59 per share.
What Happened
The CDC voted unanimously to recommend the Novavax vaccine for people aged 18 and older in the U.S. CDC Director, Dr. Rochelle Walensky, supported the recommendation, which was the final step in approving the inoculation. The Biden administration has already ordered 3.2 million doses of Novavax’s vaccine as it prepares for this year’s cold and flu season that begins in the autumn.
For Novavax, a small biotech company, the CDC approval ends a two-year struggle to bring its vaccine to market. The Covid-19 shot is the first vaccine that the company has successfully commercialized. Novavax had received $1.8 billion of government funds to develop the Covid-19 vaccine in the early days of the pandemic but struggled to get it approved and had to watch as larger rivals, Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) had their vaccines given the greenlight and racked up billions of dollars in sales.
Why It Matters
For consumers, Novavax’s vaccine provides a choice to people who may want to receive a Covid-19 vaccine that is based on more traditional methods than the newer Messenger RNA (mRNA) technology. The latter technology is what the Pfizer and Moderna vaccines were built upon. The regulatory approval also enables Novavax to begin sales and generating revenues for its Covid-19 vaccine, and to recoup the costs of developing the shot.
That said, Novavax is late to the vaccine party with nearly 80% of American adults now fully vaccinated against Covid-19. However, more than 30 million adults in the U.S. are still unvaccinated, according to CDC data. This provides Novavax with some market in this country. And the company is seeking approval for booster usage was well.
Elsewhere, Novavax has said that it plans to concentrate its Covid-19 vaccine sales on developing nations that have been slower to secure reliable doses and carry out mass inoculation programs amongst their citizens.
In approving Novavax’s Covid-19 vaccine, the U.S. Food and Drug Administration (FDA) did flag that the shot carries a risk of heart inflammation known as “myocarditis.” The European Union has also flagged this issue and placed it on warning labels pertaining to the vaccine.
What’s Next for NVAX Stock
NVAX stock moves higher on the news that its highly anticipated Covid-19 vaccine has been approved for use in American adults.
With the blessing of regulators, Novavax must now move to mass produce the vaccine and sell it around the country and wider world. While the company has cleared one important hurdle, it now moves onto new challenges.
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.
