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Why Novavax's Stock Is Surging Today

By George Budwell - Updated Apr 11, 2019 at 10:35PM

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Novavax's experimental flu vaccine hits the mark in a highly anticipated midstage trial.

What happened

Shares of the clinical-stage vaccine developer Novavax ( NVAX -0.60% ) rose by more than 11% on heavy volume in premarket trading today. What's driving this double-digit move higher?

Novavax's shares are surging in response to a positive midstage data readout for the company's experimental flu vaccine, NanoFlu. The company reported that NanoFlu produced a superior immune response in elderly adults when compared to the current standard of care, Sanofi's ( SNY 0.17% ) Fluzone High-Dose. 

Doctor holding out a signboard that reads "flu vaccination".

Image Source: Getty Images.

So what

If NanoFlu can replicate these positive results in a pivotal trial, Novavax will have a potential megablockbuster product on its hands. The U.S. flu vaccine space, after all, is projected to grow into a marketplace worth $3 billion a year by 2024. Moreover, Sanofi's Fluzone High-Dose vaccine has some well-documented shortcomings that make it extremely vulnerable to potential competitors.

EvaluateGroup -- a top biopharma analyst group -- has NanoFlu pegged as one of the most valuable vaccines currently under development. That fact alone could transform Novavax into a red-hot buyout candidate.  

Now what

With these positive midstage results in hand, Novavax plans on holding a meeting with the Food and Drug Administration about the vaccine's forthcoming pivotal trial before the middle of this year. If this regulatory meeting goes off without a hitch, the company plans on advancing NanoFlu into a late-stage trial in late 2019 -- although there is an outside chance that regulators will permit an accelerated regulatory filing, according to the company. 

What does all this mean? In brief, Novavax has a good shot at bringing a high-value flu vaccine to market as soon as 2021. In the interim, the company is also expected to release the late-stage results for its respiratory syncytial virus (RSV) vaccination study in pregnant women within the next few weeks. Novavax is thus off to a great start in 2019, but the best could be yet to come.

Check out the latest Novavax and Sanofi earnings call transcripts.

 
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