Please ensure Javascript is enabled for purposes of website accessibility

Here's How Novavax Stock Gained 48.4% in 2018

By Cory Renauer - Updated Apr 18, 2019 at 8:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Progress with two vaccines pushed the stock up last year.

What happened

Shares of the clinical-stage vaccine maker Novavax (NVAX 11.12%) gained 48.4% in 2018, according to data from S&P Global Market Intelligence. It's nearly time to find out if its vaccine works, and for better or worse, investors are increasingly enthusiastic.

So what 

Respiratory syncytial virus (RSV) feels like a cold for most people, but it frequently sends infants and older adults to the hospital or worse. Novavax's lead candidate, ResVax, succeeded in a mid-stage study with 1,600 older adults in 2015, and investors are increasingly hopeful a large pivotal trial with expectant mothers will produce winning data.

Guy in a suit drawing an upward sloping chart with his finger.

Image source: Getty Images.

Despite decades of effort, RSV continues to frustrate drug developers of all sizes. As the first vaccination option for infants, ResVax could begin adding $1 billion annually to Novavax's top line in a few short years. 

Now what

There have been 3,000 infants born to mothers receiving ResVax, and we'll know how they fared versus the placebo group when the company presents the results before the end of the first quarter. 

Before chasing this stock higher, investors need to remember this vaccine failed to prevent older adults from catching RSV in 2016. Novavax blamed an unusually weak RSV season for the last pivotal trial flop. The latest RSV season was a strong one, so the market won't show any mercy if this attempt to salvage the ResVax program fails. 

Novavax recently reported positive data for a new seasonal flu virus, NanoFlu. The company intends to begin a phase 3 study in the fourth quarter that it won't have any cash to pay for if ResVax flops. The company finished September with $127 million in cash and securities after burning through $135.4 million during the first nine months of 2018.

There's a chance Novavax could shoot up in the weeks ahead, but it just isn't worth the risk.

Check out the latest Novavax earnings call transcript.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Novavax, Inc. Stock Quote
Novavax, Inc.
NVAX
$57.15 (11.12%) $5.72

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.