In mid-November, many investors prematurely bailed out of Novavax (NASDAQ:NVAX) stock. With rival candidates making progress, it seemed that this top contender was falling back in the novel coronavirus vaccine horse race. But don’t let that discourage you from investing in NVAX stock.
What a difference a few weeks makes. Since my last article on this stock on Nov. 19, shares have surged over 37%. But, while those who bought on mid-November weakness have seen solid gains, the party’s far from over.
How so? While the company’s NVX-CoV2373 candidate wasn’t the first to make headlines, it remains a top contender where it matters most. That is to say, when it comes to quality, safety and convenience, this prospective vaccine may still have an edge.
Simply put, as it becomes more clear this major vaccine candidate will remain near the top of the pack, expect shares to climb even higher. Will we see another pop? Only time will tell. But, with potential for further gains vastly exceeding the potential for another big pullback, risk/return remains in your favor.
NVAX Stock and Its Vaccine Contender
Sure, several of its rivals are further along in the process for bringing out a vaccine. However, it’s not speed, but quality, that matters the most. Taking a look at the more relevant criteria, there are plenty of reasons why NVX-CoV2373 will grab material share of the global vaccine market.
How so? As I discussed in my last article on NVAX stock, this company’s candidate wins on the holistic front. In other words, with its combination of efficacy, safety and convenience, there’s solid reason why this candidate is a cut above the rest.
Quality and safety are important factors here. But, it’s the convenience factor that may give it the strongest edge. The mRNA (messenger DNA) rival candidates may be further along the pipeline. Yet, despite their effectiveness, their temperature requirements may hinder their marketability in emerging markets.
Sure, this may not mean much when it comes to grabbing market shares in developed economies (North America, Europe and East Asia). However, as I discussed previously, even here in the U.S. there isn’t enough cold storage infrastructure in certain areas.
Simply put, this company is far from out of the running, both globally and in the U.S. And, while shares have popped in recent days, as investors jump back in, the ship hasn’t sailed just yet. With the company still months away from releasing its next batch of major results, further gains are in the cards.
Key Events on the Horizon Could Push Shares Further
Late last month, Novavax stock popped thanks to its vaccine progress update. Sure, this pop may be pricing in much of the company’s future vaccine sales prospects. But, starting early next year, several new developments could push shares even higher.
What am I talking about? Firstly, results from its late-stage trials in the U.K. and South Africa. Interim data for both could be available as soon as early next quarter. Secondly, after some delays, the Phase 3 U.S./Mexico trial for NVX-CoV2373 will soon be underway.
Yes, that means we won’t have interim results from the U.S. trial for several months. It’s behind rivals, but Novavax is well positioned to strike when the iron is hot. With $1.6 billion in funding via Operation Warp Speed, it has the capital to expedite production and delivery once it receives approval.
In short, there are plenty of catalysts on the horizon to send shares higher from here. Granted, shares could pull back in the meantime. But don’t use this as a reason not to buy. Instead, consider any pullback prime time to enter a position.
With the Novavax vaccine likely to get approval, further developments will likely result in similar pops as we’ve seen in recent weeks. Granted, it’s not set in stone. But, based on previously released information, the odds of full approval remain high.
The Ship Hasn’t Sailed Just Yet
Those who missed out on buying Novavax last month may be kicking themselves right now. But, while you missed the most recent pop, the ship hasn’t sailed just yet. With several key developments just around the corner, buying now (either at today’s prices, or on a pullback) remains a solid opportunity from a risk/return standpoint.
The Novavax candidate may not be the first to cross the finish line. But, take into account its quality, safety, and more importantly, its convenience. There are plenty of reasons why this vaccine will wind up with material share in the global market. In fact, we already know this vaccine will be deployed in several major markets. Per updates in its last quarterly earnings press release, the company has locked down supply deals with Australia, Canada and the U.K.
Even with shares climbing back toward all-time highs due to the recent press release, consider NVAX a buy at today’s prices.
On the date of publication, Matthew McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, neither Matt McCall nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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