Novavax (NVAX) Sees Declines: Why Bulls Aren’t Worried

Novavax, Inc. (NASDAQ: NVAX)

Novavax had a great day in the market yesterday fueled by positive data released surrounding a phase 2 clinical trial. Unfortunately however, today hasn’t been so great. Nonetheless, the bulls aren’t concerned as they know more gains are to come. Today, we’ll take a look at the data that was released yesterday, what we’re seeing in the market today, and what we can expect to see moving forward.

NVAX Meets Both Primary And Secondary Endpoints In Phase 2

Yesterday, Novavax announced the results of its most recent clinical trial; a Phase 2 trial looking into the effectiveness and tolerability of its RSV F-protein recombinant nanoparticle vaccine candidate. The vaccine is designed for patients ages 60 or older. Ultimately, RSV infections kill thousands of adults each year and affect nearly a million. The study into the vaccine showed that it was well-tolerated and fulfilled both primary and secondary endpoints. Upon the release of the data, Dr. William Schaffner, the Professor of Preventative Medicine and Infections Disease at Vanderbilt University Medical Center offered the following words of encouragement…

It’s increasingly appreciated that RSV causes an enormous amount of illness on an annual basis, particularly in the older population. An RSV infection can predispose older adults to developing secondary pneumonia and admission to the hospital… Each year in the United States, approximately 14,000 people ages 65 or older die of RSV infections and approximately 900,000 have some sort of medical encounter with a doctor, or emergency room, or are hospitalized. Prevention remains the highest goal of medicine and those of us in preventative medicine and public health would like to prevent as many of these infections as possible.”

As a result of the overwhelmingly positive news, NVAX soared in the market yesterday; gaining more than 20% in a single trading session.

What We’re Seeing Today

As mentioned above, NVAX isn’t having the best of days in the market today. Currently (12:36), the stock is trading at $13.20 per share after a loss of 4.95%. Nonetheless, the bulls really aren’t concerned about today’s movement. As a matter of fact, the declines are to be expected. When big movements happen in the market, they can almost always be blamed on an overreaction. I’m not saying that gains weren’t justified, but the level of gains we saw yesterday simply wasn’t sustainable. As a result, we’re seeing a bit of a correction on the stock today; bringing it down to a more sustainable rate before we see gains continue.

What We Can Expect To See Moving Forward

Moving forward, I’m expecting to see great things in both the short and long term. Today’s movement is driving the stock down to support; from where it is likely to see more gains. Also, with overwhelmingly strong Phase 2 data, we have to imagine that Phase 3 will go off without issue and the next step will be FDA approval. All in all, this should lead to incredibly strong growth in the stock.

What Do You Think?

Where do you think NVAX is headed and why? Let us know in the comments below!

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