Novavax, Inc. (NASDAQ: NVAX) is down a bit in the market this morning, leaving some investors wondering if this is a signal to sell or a discount in the making. In my opinion, this is an opportunity in the making. Today, we’ll talk about:
- Why I believe that NVAX stock is an opportunity;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
NVAX Presents A Strong Opportunity
As mentioned above, Novavax is having a relatively rough day in the market, trading in the red as investors are unsure of whether or not to hold on. Nonetheless, I believe that these declines represent a strong potential opportunity.
The reason for this has to do with recent news and movement in the stock, as well as the company’s pipeline. Currently, the company has two core candidates under development.
The flagship candidates at NVAX are ResVax, an RSV vaccine and NanoFlu, an influenza vaccine. Both of which have the potential to be blockbuster vaccines if they hit the market.
However, in February, the stock plummeted as the result of a Phase 3 failure of the ResVax candidate. Nonetheless, the company hasn’t scrapped the drug and still believes that it may be able to find a path toward approval. Nonetheless, I believe that the declines as a result of the failed trial were far worse than they should have been, making the stock heavily undervalued.
Nonetheless, my view isn’t based on ResVax. While the candidate may have a path toward approval, that asset is up in the air. My bullish opinion on the stock has to do with NanoFlu.
We all know that seasonal influenza vaccines are losing efficacy from one flu season to the next. We’ve watched as flu outbreaks continue to get worse each year as strains of the ailment continue to grow vaccine resistant.
As a result, there is a rush to come up with a seasonal flu vaccine that actually works, and NVAX is one of the key competitors in the race. Clinical data has proven to be overwehelmingly positive. Should the data continue to go in the right direction, NanoFlu could be the top flu vaccine on the market once approved.
At the moment, the influenza vaccine market is expected to grow to be worth more than $11 billion per year by 2025.
Considering all information available, I believe that if the company only had NanoFlu, the stock would be trading far higher. However, fear surrounding ResVax seems to be discounting the tremendous potential that NanoFlu has to become a blockbuster and the value that is created from this potential.
In my opinion, the positive data and large market size leads me to believe that this is an opportunity that’s hard to pass up.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that finding a stock at its low point with strong potential and holding it for the long run can lead to significant gains.
I believe that Novavax may go a little lower in the short term, but in the long run, has potential to become a millionaire maker.
Nonetheless, as is usually the case, our partners at Trade Ideas were the first to alert us to the declines. Currently (11:31), NVAX is trading at $0.63 per share after a loss of $0.015 per share or 2.32% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NVAX. In particular, we’re interested in following the story surrounding the company’s continued work to bring NanoFlu to market. We’re also interested in what the company will do to bring ResVax to market after the recent trial failure. Nonetheless, we’ll keep an eye on the story and bring the news to you as it breaks!
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