Novavax (NVAX) Stock Falling Apart On Missed Trial Results


Novavax, Inc. (NASDAQ: NVAX)

Novavax is having an incredibly bad day in the market today, and for good reason. The company announced topline results from a key clinical trial. Unfortunately, those results didn’t quite meet expectations. Today, we’ll talk about what we saw from the trail results, how the stock reacted to the news, and what we can expect to see from NVAX moving forward. So, let’s get right to it…

NVAX Reports Negative Trial Results

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As mentioned above, Novavax is having a rough day in the market today after reporting less-than-desirable phase 3 Resolve study results. The results revolve around the company’s RSV-F vaccine candidate. The vaccine was designed for the treatment of lower respiratory tract disease. Unfortunately, it was announced that the primary and secondary endpoints on the trail were not met.

At the end of the day, the RSV-F vaccine did prove to be well-tolerated by patients, but that’s not enough. Effectiveness is key. In terms of effecacy, the vaccine missed the mark when it comes to preventing RSV-associated lower respiratory tract disease and it did not reduce the occurance of all symptomatic respiratory disease. In a statement with regard to the results, Stanley C. Erck, President and CEO at NVAX, had the following to offer:

While the results from the Resolve trial are unexpected, we continue to believe in our technology and product candidates based on the totality of the data from our RSV F Vaccine franchise… We expect to gain a better understanding of the data from both the Phase 2 rollover and Phase 3 trials as we further analyze and review them internally, as well as with our investigators and potential partners. We intend to provide a more in-depth update at our investor and analyst meeting on October 11, 2016.”

How The Stock Reacted To The News

As investors, one of the first things that we learn is that the news moves the market. Any time positive news is released with regard to a publicly-traded company, we can expect to see gains in the value of the stock as a result. However, the news released with regard to NVAX was anything but positive. The company is highly dependent on this vaccine and the technology that lead up to it, so a sign that it is not effective is a big kick to the company’s future. As a result, we’re seeing big declines in the value of the stock today. Currently (11:42), the stock is trading at $1.44 per share after a loss of $6.90 per share (82.73%) thus far today.

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What I’m Expecting To See Moving Forward

Moving forward, I have a relatively bearish opinion of what we can expect to see from Novavax. While I will admit that there is a silver lining surrounding the dark cloud in that the data seems to offer something that the company can build from, today’s news is overwhelmingly negative. As a clinical-stage company, NVAX was heavily dependent on the trial showing positive results. With negative results, investors have to hope that the study data moving forward is positive and that this company can eventually get something approved and to market. At the moment, things are looking relatively grim. At the end of the day, this may prove to be an incredible opportunity to buy low and sell high, but for me, the risks are just too great!

[Image Courtesy of Wikimedia]


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