The Waiting Game Is Wearing Thin for Novavax Investors

Stock Market
  • Novavax stock (NVAX) struggles to gain traction without an EUA for Nuvaxovid
  • Even if the company gets approval, its protein vaccine may not reduce vaccine hesitancy
  • NVAX stock may be a stock for risk-tolerant investors to keep on their watchlist
Source: vovidzha / Shutterstock.com

If I had to choose one word to describe Novavax (NASDAQ:NVAX) stock it would be frustration. Like the mythical Sisyphus, Novavax shareholders have pushed up NVAX shares. And on each occasion, they’ve seen the share price slide back down. The last slide started in mid-December, and maybe the best news I can offer to investors is that the stock may have found a bottom.

I’d feel more comfortable in calling a bottom if the Food & Drug Administration (FDA) would approve Nuvaxovid, the company’s Covid-19 vaccine candidate under an emergency use authorization (EUA). Barring news on that front, investors will have to wait for the company’s next earnings report in May.

What’s the Delay?

It’s confounding that Novavax has not received an EUA for Nuvaxovid. The company’s application was submitted in January, but to date the Food & Drug Administration (FDA) has not even set a date for when the FDA’s advisory committee would meet to review the vaccine. And when the FDA sets a date it’s likely to be two to three weeks in the future so relevant parties have time to prepare.

No reason has been given for the delay. Perhaps because the administration is not attempting to move at “warp speed” the process only seems lengthy. But that is little comfort to Novavax shareholders who may be sitting on a substantial loss.

 Does no news mean good news? Novavax management certainly hopes so. The same can be said for anxious investors who are forming their own opinions as to why the vaccine is being delayed.

That’s not to say approval isn’t coming. And when it does come it could come quickly. And if it’s approved (which seems likely), that would be a catalyst for NVAX stock by itself.

The problem as I see it is that the stock will be bouncing off a base that continues to get lower. Since I last wrote about NVAX in mid-February, the stock is down an additional 6%.

Society Needs a Break

Covid-19 is not gone. Optimistically, it may become an endemic illness such as influenza. And if that’s the case, then the buying case for Novavax is more attractive.

Because it’s a protein-based vaccine, the company has an opportunity to make a case to the millions of potential individuals that would presumably be eligible for a booster.

However, it’s likely to be harder to convince many people who were already reluctant to get the vaccine in the first place to get a booster or a second booster. And that doesn’t matter what company’s name is on the vaccine. That’s already been the case in Germany.

Novavax delivered 4 million doses, but as of March 21, 2022 only about 40,000 Germans had taken the company’s jab. It’s early, but it does poke a few holes in the thinking that vaccine hesitancy would be alleviated by a more “familiar” vaccine.

NVAX Stock Is a Stock to Watch But Little More

I agree with Vandita Jadeja who advises current Novavax shareholders not to sell. You may not recoup all your losses, but the bag will get lighter upon FDA approval. And I suppose if you’re willing to put some capital at risk, NVAX stock may present a trading opportunity.

But as I see it, Novavax has too many “ifs” in a market that already has enough of those. Furthermore, the rest of the company’s pipeline is years away from being available for commercial use. If you’re not otherwise engaged with NVAX stock, it’s best to wait until the picture gets clearer. Once the FDA sets a meeting date, you’ll have plenty of time to buy shares if that’s your desire.

On the date of publication, Chris Markoch 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.

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.

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