Image source: Getty Images.

What happened

According to data from S&P Global Market Intelligence, shares of Novavax (NASDAQ:NVAX) fell 16.3% in November. The vaccine maker's stock slumped after it announced a 30% reduction to its workforce in an effort to reduce its cash burn rate moving forward.

So what

This latest setback apparently kept Novavax's shares from enjoying a boost from Donald Trump's surprise victory over Hillary Clinton last month. The broad-based iShares Nasdaq Biotechnology ETF (NASDAQ:IBB), for instance, rose by nearly 6% in November, presumably because of Trump's less caustic rhetoric toward the industry's controversial practice of hiking the prices of older medicines:

IBB Chart

IBB data by YCharts.

Now what

Novavax is attempting to minimize dilution for shareholders while its experimental RSV vaccine winds its way through a late-stage study in pregnant women. The stated goal of this study is to assess the vaccine's ability to prevent RSV in infants via maternal immunization.

The problem is that the biotech exited the most recent quarter with only $300 million in cash, and this study isn't scheduled to read out until mid-2020, according to Moreover, this RSV vaccine candidate essentially showed no benefit whatsoever in its late-stage trial in elderly adults earlier this year, implying that its chances at conveying immunity in infants through an indirect route such as maternal immunization is probably slim at best. 

With a long wait ahead for any major clinical catalysts and the specter of dilution rearing its ugly head, investors may want to watch this speculative biotech from the safety of the sidelines for now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.