You may not have heard of Novavax (NASDAQ: NVAX) About six months ago. The biotech company’s shares were trading at less than $ 5 a share, and the coronavirus had yet to embark on its deadly journey around the world. Since then, the stock has grown nearly 34-fold, and Novavax has secured a place among leaders in the race to develop a coronavirus vaccine.
YCharts NVAX data
Some rivals are a few steps ahead from a timeline perspective. Modern (NASDAQ: MRNA) and Inovio Pharmaceuticals (NASDAQ: INO)For example, they have already reported interim Phase 1 data and are moving on to further studies. Novavax plans to release initial data from its human test later this month. However, these days, everyone seems to be talking about Novavax.
What’s going on? We’ll see.
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Novavax began enrolling Phase 1 participants, part of a Phase 1/2 trial in May. The phase 2 part will begin after the results of phase 1 on safety and immune response. Phase 1 is testing the vaccine on approximately 130 participants ages 18-59 in Australia. The second part of the test will be expanded to more countries, including the US, and will extend the age range of the volunteers.
Protection against future infections.
So how does the vaccine work? Novavax, using its recombinant nanoparticle technology and the genetic sequence of SARS-CoV-2 (the virus that causes COVID-19), produces the antigen from the coronavirus spike protein. A spike protein binds to human cells, opening the door to infection. The idea is that if the body is exposed to the antigen through the vaccine, it will produce antibodies that will protect against future infections. The vaccine also includes Novavax’s proprietary adjuvant, designed to boost the immune response, and neutralizing antibodies, which can block infection.
A small side note on Novavax technology: The company does not yet have products on the market, but it has demonstrated the power of its vaccine development capabilities. Earlier this year, Novavax reported that its investigational flu vaccine candidate, NanoFlu, met all of the primary endpoints in a phase 3 trial. The company plans to ship the product to the US Food and Drug Administration. United States for review.
As for its coronavirus program, in May Novavax acquired Praha vaccines in the Czech Republic to produce more than 1 billion doses of vaccines starting next year. So if all goes well in testing, we know that the company has the necessary manufacturing capabilities.
The biggest prize so far
That all sounds positive. But what really sent Novavax shares into the stratosphere recently, and put the company on everyone’s radar screen, has to do with funding. Operation Warp Speed, the White House effort to bring a vaccine to market in January, awarded Novavax $ 1.6 billion in funds from the Department of Health and Human Services to advance its coronavirus vaccine. That is Operation Warp Speed’s biggest award so far. Novavax said the award supports development through FDA approval and the production of 100 million doses of vaccines as soon as this year ends.
Since that announcement on July 7, Novavax shares have risen 34%. So now, while we wait for the Novavax coronavirus vaccine test data, we can ask ourselves if stocks can continue to rise. Although the price increases have been rapid and abrupt, the positive test data is likely to push them further. That said, investors could demand details. When rival Inovio reported provisional data from phase 1, the shares fell. Some investors expected more details on neutralizing antibody production. It seems like Novavax might be on the right track in the communication department. In a virtual presentation this week, the company indicated that the results of the trial would include details on the response of T cells and antibodies, Evaluate reported.
Overall, as long as the trial results are encouraging, the large government investment in Novavax may continue to drive investor optimism. Now the question is whether, at these levels, Novavax is a purchase. I think NanoFlu’s perspectives are great. I like the company’s portfolio, and the coronavirus program is a bonus. But I am concerned that the stock has become too sensitive to the news about the coronavirus vaccine these days. For now, this news has pushed stocks higher.
But if a competitor reaches the finish line first, or the Novavax data disappoints, this biotech stock may suffer a serious drop. Although the rewards can be high, so is the potential risk. Aggressive investors with risk tolerance may consider taking a position on Novavax, but others may opt for a safer bet on the COVID-19 vaccine or a diversified basket of stocks involved in the coronavirus vaccine race.
