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What happened

Shares of the clinical-stage biotech Novavax (NVAX 0.93%) fell by as much as 85% in pre-market trading on Friday due to a disappointing top-line data readout for its experimental respiratory syncytial virus (RSV) vaccine. Specifically, the company reported that its RSV F vaccine candidate failed to meet either its primary or secondary endpoints in a large, late-stage trial in older adults. Adding insult to injury, the vaccine wasn't even close to reaching its primary endpoint (prevention of moderate to severe RSV-associated lower respiratory tract disease) based on the company's reported p-value of 0.78.  

So what

Besides losing the bulk of its valuation, Novavax just whiffed on its most promising product candidate by a wide margin, and arguably its best chance at transforming into a commercial operation in the near term. Long story short, this vaccine could have generated billions in sales if approved, and may have even gone on to become one of the world's best-selling vaccines of all time. 

Now what

As Novavax's high-value RSV franchise seems to be dead on arrival at this point, this stock could have trouble finding a bottom anytime soon, despite today's jaw-dropping decline. After all, there are now serious questions surrounding the viability of Novavax's vaccine development platform in general, and the biotech's other clinical candidates for influenza and Ebola are several years away from even reaching a pivotal-stage data readout. I wouldn't try to catch this falling knife right now.