Stock Market

Novavax Stock Is Too Sickly To Buy

  • Novavax’s Covid-19 vaccine still isn’t approved for use in the U.S.
  • With the pandemic in full retreat and the majority of people now fully vaccinated, demand for Novavax’s vaccine is likely to be weak.
  • Rival pharmaceutical companies Pfizer and Moderna have beat Novavax to market with multiple Covid-19 treatments.
Source: rarrarorro /

Any hope that pharmaceutical company Novavax (NASDAQ:NVAX) stock will gain widespread approval to bring a Covid-19 vaccine to market is now over.

The Gaithersburg, Maryland-based company might still be holding out hope to get its Covid-19 vaccine approved around the world, but the likelihood of that happening looks increasingly dim, especially as demand for the vaccine is dropping in most countries as a majority of the population is now fully inoculated — and subsequent strains of Covid-19 are proving to be as mild as the common cold.

These facts help to account for the fact that NVAX stock has plummeted 60% year to date to $58.66 a share. The stock is nearly 80% lower than its 52-week high of $277.80.

NVAX Novavax $53.51

Eternal Optimism

Novavax and its champions continue to hold out hope that the U.S. Food and Drug Administration (FDA) will, at long last, grant Novavax’s Covid-19 vaccine the Emergency Use Authorization (EUA) status that the company desperately craves.

After more than a year of repeated delays, the latest news is that the FDA plans to convene a meeting on June 7 of its Vaccines and Related Biological Products Advisory Committee to review and discuss Novavax’s vaccine and EUA application. That news was enough to send NVAX stock up 12% in a single trading day on May 2. Sadly, the rally was short-lived and the company’s share price is again on the downslope.

Of course, Novavax doesn’t have all its proverbial eggs in the U.S. basket. The pharma company is also looking abroad to foreign markets where it hopes to sell its Covid-19 vaccine. The latest news on the foreign front is that Novavax has filed an application with Britain’s drug regulator to use its Covid-19 vaccine to inoculate youth ages 12 and up.

No word on whether the British application will be successful. However, in February of this year, Britain approved the company’s two-dose “Nuvaxovid” vaccine for use in adults as the omicron variant of Covid-19 was raging across the United Kingdom. Novavax’s vaccine has also received approvals in Canada and Australia.

Missing the Boat

While many investors are quick to buy NVAX stock on any news related to its vaccine approval or potential approval in various countries, the real issue the company faces is with demand for its vaccine once approved.

In most western nations, a majority of the population is now fully vaccinated, having received shots from rival vaccine maker’s Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA). Neighboring Canada approved the Nuvaxovid vaccine in February of this year, but, at that time, 84% of the population age five and up were considered fully vaccinated with no need for any further inoculations against Covid-19. In the U.S., two-thirds of the population is now fully vaccinated.

Barring some mutant strain of Covid-19 that is much more severe than other variants of the disease, there is unlikely to be huge demand for Novavax’s vaccine when and if it continues to get approved in jurisdictions around the world. Rivals Pfizer and Moderna beat Novavax to the finish line with their Covid-19 vaccines, boosters and pills, and they are reaping the benefits.

Moderna just reported blockbuster first-quarter earnings as the company sold $5.9 billion worth of its Covid-19 vaccine between January and March of this year. Novavax has clearly missed the boat with its Covid-19 treatment and is, at best, destined to play catch-up to its larger pharmaceutical rivals.

Don’t Buy NVAX Stock

This late in the pandemic, there’s really no reason to buy NVAX stock. The company’s Covid-19 vaccine is likely to get approval in the U.S. just as the disease is petering out across the country.

While Covid-19 is expected to spike during cold and flu season and new variants might emerge, when that happens people will likely be taking Pfizer’s Covid-19 pill rather than continuing to get vaccinated.

Having missed its opportunity to get its Covid-19 treatment to market in a timely fashion, and with the share price continuing to drop, NVAX stock is not a buy.

On the date of publication, Joel Baglole 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 Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.