Count Novavax (NASDAQ:NVAX) investors among the winners of 2020. At least those who got in early. The biotech company has spent the last decade focused on vaccine development, and that meant a payoff in 2020 when the desperate search for a novel coronavirus vaccine began. Novavax was among the companies on the hunt resulting in huge gains for NVAX stock. At its peak last August, NVAX was up 3,875% from the start of the year!
Now trading in the $135 range, NVAX is down 24% from August highs. It has been in recovery mode since November, but could soon return to growth. The reason is NVX-CoV2373.
Novavax’s Covid-19 vaccine candidate is now in stage 3 clinical trials, and the company already has several big purchase orders in place.
Investors bailed on NVAX stock based on the company losing the race to be first to market with a vaccine. They’re about to learn that global demand is huge, and there’s plenty of sales to be made by runners-up.
The NVX-CoV2373 Advantage
Novavax’s Covid-19 vaccine candidate NVX-CoV2373 employs the company’s advanced recombinant nanoparticle vaccine technology. It differs from the currently approved coronavirus vaccines by taking a traditional approach. NVX-CoV2373 uses a spike protein and adjuvant — the same method used to develop flu vaccines — instead of RNA.
The downside to the traditional approach is that it takes longer. However, there are significant upsides. Vaccines can be manufactured using existing equipment, making it easier to ramp up mass production. Doses only need to be refrigerated, not kept in a deep freeze. This will make distribution and rollout significantly easier. The Covid-19 vaccines currently in use are RNA-based. They require specialized equipment to manufacture, and their deep-freeze storage requirements have left governments scrambling.
NVX-CoV2373 Goes Into Stage 3 Clinical Trials
NVAX stock peaked last August, then began to slide. A mix of issues contributed to the decline, including a Q2 earnings and revenue miss. But the big factor was the growing realization that Novavax was going to be beaten to market with the first Covid-19 vaccine.
However, starting in November, NVAX stock began to rally. On Nov. 9, the company announced NVX-CoV2373 was granted Fast Track designation by the U.S. Food and Drug Administration. On Dec. 28, the company began Phase 3 clinical trials of its vaccine in the U.S. and Mexico, testing which involved 30,000 volunteers. This trial is being conducted in partnership with Operation Warp Speed (OWS).
Novavax Inks Big Contracts to Supply Vaccine
In December, Novavax announced the government of New Zealand had signed a contract to purchase 10.7 million doses of NVX-CoV2373 — assuming the vaccine passes its Phase 3 clinical trials and is approved for use. 2021 kicked off with good news for Novavax investors. The government of Australia announced it would buy 51 million doses of NVX-CoV2373, with the option to buy an additional 10 million. Delivery is expected to start by mid-2021.
Bottom Line on NVAX Stock
NVAX stock is up over 3.4% so far in 2021. Once NVX-CoV2373 completes its clinical trials and is approved for use, I suspect today’s levels are going to look awfully cheap.
The topper? Novavax isn’t just working on a coronavirus vaccine. The company has been working on commercialization of vaccines for a wide range of diseases, including influenza and SARS. As part of that effort, it has made big strides in the application of nanotechnology to vaccine development. It’s the potential for future wins beyond NVX-CoV2373 that landed Novavax on my recent list of biotech stocks to buy.
— Louis Navellier and the InvestorPlace Research StaffAmerica's #1 Stock Picker: BUY "AMZN of Houses" [sponsor]
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Source: Investor Place