Novavax plunges 28% as investors reconsider coronavirus fears


Yesterday, shares of specialty vaccine producers shot up in response to fears of the coronavirus, otherwise just referred to as the China virus, as people became afraid of a potential breakout in the U.S.

However, many of these same stocks, which for the most part fall in the small-cap or even nano-cap range, have given back much of those gains as investors calmed down. One of those was Novavax (NASDAQ: NVAX), whose shares plunged by almost one-third on Wednesday.

Although there wasn’t a major press release or announcement from the company that fueled this move, the company did respond to analysts that had asked the company whether it would be developing a response to the coronavirus that’s now reached the U.S. However, it seems that the company, which is currently developing a flu vaccine, might not be able to fully seize on this opportunity after all.

“We don’t expect Novavax will run human trials without non-dilutive government funding,” wrote Ladenburg Thalmann analyst Michael Higgensin a note regarding Novavax and whether it will be able to get involved in the market for a coronavirus vaccine. “The timing for such support in our view depends on how severe and uncontrolled the 2019-nCoV becomes.”

Right now, Novavax is trying to develop clones of the new coronavirus, which would be the first step in developing a potential vaccine. While it’s still just the beginning, the one thing that the company does have going for it is that it’s already developed a vaccine for another condition, the Middle East respiratory syndrome (MERS), which also is a type of coronavirus. However, despite this advantage, Novavax might still be quite a way away before it develops a potential vaccine if it does at all. Even if it does, it’s possible that another company will beat it to the punch so to speak.

Over the past year, shares of Novavax have fallen by 85%. Despite this, most analysts covering the stock have an optimistic appraisal of the company. Out of the six or so Wall Street analysts covering the company right now, four of them have a “buy” rating while just one has a “hold” and another has a “sell.”

Most of this analyst optimism doesn’t have anything to do with the coronavirus, but rather its flu vaccine it is creating. Specifically, it’s a nanoparticle-based injection called the NanoFlu which has the potential of becoming the company’s first approved product. Time will tell whether the company ends up as a success.

Novavax Company Profile

Novavax Inc is a biotechnology company that develops vaccines. The company works in the clinical stage of development with a focus on delivering novel products that prevent a broad range of diseases.

Novavax works together with its wholly owned Swedish subsidiary to produce vaccine candidates to respond to both known and emerging disease threats. The company believes its vaccine technology has the potential to be applied broadly to a wide variety of human infectious diseases. Novavax develops product candidates geared toward all age demographics of the general population. – Warrior Trading News