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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.

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.

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Stocks Mentioned

Sanofi Stock Quote
$47.99 (0.17%) $0.08
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$181.75 (-0.60%) $-1.10

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