Novavax (NASDAQ:NVAX) stock, a big Covid-19 vaccine play in 2020, fell 15% overnight on plans to raise $250 million in debt and equity.
The plan is to offer $125 million in debt and $125 million in common stock, including options to underwriters for $18.75 million more at the public offering price, less underwriting discounts and commissions.
Novavax was trading early Dec. 15 at $14.33 per share, a market capitalization of about $1.12 billion. At the company’s height in early 2021, shares traded at $290 each.
NVAX Stock: Fall of a Covid-19 Star
Novavax stock jumped from $5 to $142 in the early days of the pandemic. This was based on U.S. government aid and big manufacturing orders. The company said its vaccine candidate could be stored in regular refrigerators.
I suggested investors sell as early as November 2020, noting the company’s dependence on the pandemic, in contrast to rivals Pfizer (NYSE:PFE), BioNTech (NASDAQ:BNTX) and Moderna (NASDAQ:MRNA). I reiterated that call last April when the stock was at $59 per share.
The problem is that Novavax is still just a Covid-19 player while its rivals have moved on to other drugs. It recently agreed to make its vaccine in Canada after an emergency use authorization (EUA) was updated.
Analysts are divided on Novavax, with two of those at TipRanks saying buy and two more saying sell. Its vaccine, now called Nuvaxovid, has won support as a possible booster shot. It could win customers from Pfizer’s recent decision to quadruple prices after the government’s purchasing program expires. This would mean selling Nuvaxovid for less and finding money to advertise it.
What Happens Next?
Novavax lost $1.74 billion last year on sales of $1.14 billion. While sales are up in 2022, it’s still losing money.
In the Covid-19 vaccine race, it turns out that the bronze medal is not good enough.
On the date of publication, Dana Blankenhorn held a long position in MRNA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
