Part of the problem was that April simply wasn't a good month for biotech stocks in general, thanks to President Trump's trade war with China. But Novavax didn't help matters when it decided to execute a large secondary offering of 34,848,507 shares of its common stock at $1.65 per share.
While this secondary offering wasn't exactly a surprise based on the company's projected cash needs over the next year or so, investors apparently weren't pleased by the fact that Novavax issued shares at a marked discount relative to the closing price prior to the offering. Specifically, Novavax's stock closed at $2.08 the day before this offering became public knowledge.
Another major issue facing Novavax at the moment is a lack of catalysts in the back half of 2018. As things stand now, the company won't release another material update for its experimental respiratory syncytial virus vaccine candidate until the first quarter of 2019.
By then, the biotech will probably be painfully close to issuing yet another secondary offering in order to meet its financial obligations, putting further pressure on its shares. Stated simply, there's no good reason to think this biotech will rebound anytime soon.
So, even though Novavax is targeting some massive vaccine markets with its mid- to late-stage pipeline, the company's weak financial position and history of clinical missteps strongly suggest that investors should shy away from this name for now.