Novavax (NASDAQ:NVAX) transitioned from being an research and development biotech company to a Covid-19 vaccine manufacturer this month. However, NVAX stock has sold off despite several breakthroughs in its recent earnings call.
Investors seem fixated with potential FDA approval delays and poor public relations management, which negatively impacted the company stock. However, Novavax is now a Covid-19 vaccine player with a superior product that could cement its positioning in the industry.
NVAX stock has witnessed extraordinary growth since the beginning of the year. It started the year priced at roughly $113 and went as high as $331 at one point. The stock has grown by over 130% since the start of the year.
With the massive growth opportunities ahead, NVAX stock is likely climb higher once it gets the FDA approval.
Huge Steps Forward
The narrative about the potential troubles that Novavax might run into with the FDA has shifted the focus from the huge strides the company has made of late. Firstly, it has submitted an emergency use authorization (EUA) application for India, the world’s second-most populous country after China. Moreover, it has also submitted a EUA with Indonesia and the Philippines. Together with India, it forms more than 20% of the global population.
Moreover, it has also submitted an emergency use listing application with the World Health Organization. That effectively opens the door for sales to several developing nations, representing roughly 70% of the global population.
Additionally, the company’s Booster Development Program has reported stellar results, and it should be ready to ship its Covid-19 vaccine this month. Novavax has more than 100 million doses in its inventory that is ready for distribution. On top of that, it collected $1.1 billion in advance payments and is now sitting on a $2.1 billion cash pile.
The FDA requested Novavax to improve its analytic methods to comply with their requirements. Market bears are making a big deal of this development and giving the company no leeway. Teething problems were common with Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) early on, but the bears aren’t giving Novavax the grace to complete its FDA requirements.
Novavax’s Position as a Competitor
Novavax is late to the party as far as the Covid-19 vaccine market is concerned. The first movers have taken a sizeable chunk of the market. However, the major opportunity for Novavax and the late bloomers is in the developing world.
The booster market is highly attractive, and Novavax is in a strong position to establish its dominance in the niche. Its booster offerings are highly competitive with what has been advised by Pfizer and Moderna. BioNTech (NASDAQ:BNTX) and Pfizer are also working on their booster, which will go to trials this month.
Moreover, Novavax has the edge over its competition in efficacy and stability compared to Pfizer and Moderna. However, its competitive position will depend a lot on its manufacturing ability.
Bottom Line On NVAX Stock
Novavax has delivered several positive developments to its investors who seem overly concerned about its prospects with the FDA. Those concerns are overblown and takeaway from the massive strides it has made of late.
The company’s vaccine candidate can become a major vaccine player in the developing world. Manufacturing capacity is the key for the company in its ability to push ahead successfully.
Hence, NVAX stock has a bright future ahead and is undervalued based on its positive outlook.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.