On Wall Street, it looked like Tuesday would be a repeat of Monday, with force in the Dow Jones industrial average (DJINDICES: ^ DJI) along with weakness in the tech-heavy Nasdaq Composite. A big drop late in the day, however, took all the major brands of the market lower, with the S&P 500 (SNPINDEX: ^ SPX) divide the difference between the other two indices.
The share of today
|
Index |
Percentage change |
Point change |
|---|---|---|
|
Dow |
(0.38%) |
(105) |
|
S&P 500 |
(0.80%) |
(27) |
|
Nasdaq Composite |
(1.69%) |
(186) |
Data Source: Yahoo! Finances.
Early gains had come from optimism over Russia’s announcement of that country’s approval of a new COVID-19 vaccine for public use. However, back in the US, shares of vaccines for coronavirus vaccines Novavax (NASDAQ: NVAX) en Inovio Pharma (NASDAQ: INO) were sharply lower on nervousness over the question of whether their vaccine candidates would make it to the finish.
Image Source: Getty Images.
Novavax treats disappointment over earnings time
Shares of Novavax were down 16% on Tuesday. The company had announced its second-quarter results last Monday, and right out of the gate investors were not happy with what they saw.
From a financial point of view, there was not much in the report for shareholders. Revenues of $ 35.5 million were increased tenfold from the annual level, which helped Novavax reduce its net loss to $ 17.5 million. The primary reason for the improvement was the $ 2 billion in funding for development and commercialization of Novavax’s candidate NVX-CoV2373 vaccine, which includes money from the Coalition for Innovations for Epidemic Preparedness, the Department of Defense, and the Operation Warp initiative Speed of the federal government.
The release also announced positive Phase 1 data in the Phase Candidate’s Phase 1/2 clinical trial. Animal models showed protection, and the trial itself showed solid T-cell responses, superior levels of neutralization, and a reassuring safety profile.
However, investors had expected more from Novavax, especially after the large financing with the government. Now, with competition heating up in the race for a fully-fledged COVID-19 vaccine, shareholders seem more nervous than ever about Novavax’s chances of winning.
An even round?
Inovio’s share did worse, declining by 23%. It also provided an update on its recent progress toward a COVID-19 vaccine, and investors had even more questions about what the company said.
The quarterly release of Inovio late Monday included the ugly numbers you would expect from a company for development stage, with actually no significant turnover and much broader loss than in the period of the year ago. Yet what investors were looking for was good news on the fax front. Phase 1 trial data from INO-4800 were reasonably good, but some felt that plans to launch a September 2/3 study in September could come too late to do anything good for the company.
Moreover, stock analysts stepped up with negativity. Stifel cut its price target on Inovio from $ 24 to $ 16 per share, while Cantor Fitzgerald made an aggressive cut from $ 45 to $ 31. Roth Capital was even more explicit, saying that INO-4800 is unlikely to become the ultimate winner and repeat its sales rating on Inovio.
Of course, a safe and reliable COVID-19 vaccine would be good news, no matter where it comes from or who develops it. But for investors, it’s a lot about who gets to the finish line first. Unforgettable there will be losers in the race, and that could mean bad for shareholders who end up with the wrong pharma and biotech shares.
