Modern (NASDAQ: MRNA) ranks as one of the most talked about biotechs around. The rapid progress in developing a candidate for coronavirus vaccine catapulted the company into the national spotlight earlier this year. Moderna now stands as one of only a handful of drug makers with experimental coronavirus vaccines in the late-stage test.
But there is another vaccine for coronavirus that investors really need to see now. Forget Modern. Here’s the reason you want to keep your eyes peeled Novavax (NASDAQ: NVAX).
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Novavax’s Cinderella story
Novavax leaves 2019 colorful quite a bit on. The biotech market fell nearly 90% last year after announcing its second flop for respiratory syncytial virus (RSV) vaccine candidate ResVax in a late-stage study.
However, the company hopes another pipeline candidate could help it rise from the ashes. In January 2019, Novavax reported encouraging results from a Phase 2 study evaluating nano-particle base vaccine NanoFlu. The biotech initiated an October 3 study of NanoFlu.
That late-stage research went almost as well as Novavax could have dreamed. In March 2020, the company reported overwhelmingly positive results in a head-to-head matchup between NanoFlu and Sanofithe successful flu vaccine Fluzone Quadrivalent.
Novavax intends to follow an accelerated approval path from the Food and Drug Administration for NanoFlu. CEO Stan Erck said in the company’s conference call in May that Novavax believes the vaccine “will be a game-changer for preventing flu.”
An even bigger potential game changer, however, could be Novavax’s COVID-19 vaccine candidate, NVX – CoV2373. The biotech announced positive results from the Phase 1 part of a Phase 1/2 study of the experimental vaccine on August 4, 2020. Those results were so good that some analysts considered NVX-CoV2373 to be potentially the best in class .
Language of the band
Moderna-stock has certainly been a big winner this year. However, it does not hold a candle for Novavax. The biotech stock is up by a whopping 3,600%. That is an astonishing increase and more than 14 times greater than Moderna’s year-to-date profit.
NVAX data provided by YCharts
Novavax’s performance was so impressive that the chart above obscures the fact that its shares at the end of March rose almost as much as Moderna’s shares. Much of the excitement among investors in the first quarter stems from optimism about NanoFlu. Novavax did not begin its Phase 1 testing of NVX-CoV2373 until the end of May.
However, there is no doubt that Novavax’s COVID-19 vaccine candidate has fueled the meteoric rise of supplies in the last three months. Any positive development along the way related to the company’s coronavirus program served as an additional catalyst that drives its share price higher.
One major advantage over Moderna
Moderna enjoys a clear advantage over Novavax in terms of clinical advances for its respective COVID-19 vaccine candidates. Novavax began a clinical phase 2b trial of NVX-CoV2373 earlier this week, while Moderna initiated an initiating study of mRNA-1273 on July 27th.
Thanks to its recent $ 1.5 billion supply agreement with the US government, Moderna has also attracted Novavax in the amount of funding for its coronavirus program. Novavax has raised more than $ 2 billion for NVX – CoV2373, while Moderna has raised commitments for financing of up to almost $ 2.5 billion.
However, Novavax has one major advantage over Moderna that investors should especially appreciate. Even after the huge profit so far this year, Novavax’s market cap stands at around $ 9 billion. Moderna’s market cap is almost three times larger.
Both Moderna and Novavax would be big winners if their COVID-19 vaccines were successful. But Novavax also claims promising potential for NanoFlu, and the appreciation of its share is much more attractive than Moderna’s. I do not expect Novavax to stand in the shadow of Moderna much longer.
