After reaching an all-time excessive of $189.40 per share in early August, shares of coronavirus vaccine developer Novavax (NASDAQ: NVAX) have fallen by almost 40%, to $114.62, in lower than a month. With the stock getting crushed laborious, traders may be questioning if they’re catching a falling knife in the event that they act now to purchase the dip.
Because it seems, not solely does Novavax have probably the most promising candidates within the coronavirus vaccine race, however it additionally has ample monetary backing from governments world wide for its analysis. Let’s check out why this is a wonderful time for traders to be part of Novavax’s future for an affordable price.
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A lot of the rationale for the descent in Novavax’s stock price comes from information that AstraZeneca (NYSE: AZN) and Oxford College’s experimental coronavirus vaccine, AZ1222, is into consideration by the Trump administration for fast-tracking, in accordance with White Home chief of workers Mark Meadows. If that occurs, it might imply the vaccine candidate would solely have to reveal immunization response in about 10,000 individuals in its ongoing section 2/three scientific trial, as a substitute of the 30,000-enrollment goal required for regulatory approval. If it does, AZ1222 may obtain an Emergency Use Authorization from the U.S. Meals and Drug Administration (FDA) as early as September, successfully beating all different corporations to a COVID-19 vaccine.
Such a first-to-market benefit may create billions in income, thanks not least to the sheer scale of AstraZeneca’s manufacturing capability. The corporate’s administration thinks they are going to have the ability to produce 2 billion doses of AZ1222 (sufficient for 1 billion individuals) every year by the tip of 2020.
There may be additionally ample scientific foundation for accelerating AZ1222’s growth. In section 1, the overwhelming majority of individuals who obtained the vaccine candidate developed neutralizing antibodies, that are small proteins that acknowledge a pathogen’s particular elements and forestall it from invading wholesome cells. There may be proof that the immune response may final for no less than 12 to 18 months.
Moreover, individuals demonstrated a sturdy T-cell response. T-cells acknowledge virus-infected cells and inform these cells to self-destruct, stopping the virus from spreading all through the physique. In contrast to antibodies, which may disappear simply weeks after dosage, T-cells can type recollections of pathogens for months or years.
Is now a great time to take a position?
Novavax’s DNA-encoded experimental coronavirus vaccine, NVX-CoV2373, additionally produced sturdy neutralizing antibody and T-cell responses when given to individuals in section 1. Nonetheless, the vaccine candidate solely entered section 2 on Aug. 24, that means that even when each scientific trial is profitable, the vaccine doubtless will not enter advertising and marketing till early 2021.
Regardless of that, one interesting side of Novavax is its market cap, at the moment at a meager $7 billion — a couple of tenth of AstraZeneca’s. Take into account that investing in coronavirus vaccine stocks is in no way a black-and-white endeavor. Simply because AstraZeneca is forward of the sport doesn’t imply that different corporations can not catch up and share the market.
Arguably a overwhelming majority of the world’s 7.eight billion inhabitants will need immunization towards SARS-CoV-2. And Novavax’s administration additionally states that the corporate will have the ability to produce 1 billion doses of its vaccine candidate by subsequent yr. Even when it solely secures orders of, say, 500 million doses, at $20 per dose, that is nonetheless $10 billion in potential gross income.
Novavax stock may be low-cost proper now, contemplating the room it has for progress subsequent yr. Traders who’ve been sitting on the sidelines ought to act now to purchase Novavax, and pay little consideration to market fluctuations within the quick time period.
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