Shares of the clinical-stage biotech Novavax (NASDAQ:NVAX) are up by 10.65% as of 10:34 a.m. EDT today. The biotech's shares have now rallied by an astounding 80.7% this week. The spark?
Novavax's shares have been bolting higher of late in response to a newly released clinical update for the company's experimental respiratory syncytial virus (RSV) vaccine known as ResVax. Specifically, the company reported that a new analysis revealed that infants immunized while still in the womb with ResVax exhibited a 56.9% reduction in the incidence rate of pneumonia over the first year of life. The analysis in question was presented at the 2019 IDSOG Annual Meeting held in Big Sky, Montana.
Based on how Novavax's stock has reacted to this clinical update, investors seem to be under the impression that the company may now be able to find a viable regulatory pathway for ResVax in either the U.S. or another high-value market abroad. Such a development would obviously be a huge win for the company and its shareholders, given that ResVax's target market represents a blockbuster commercial opportunity.
The bad news is that Novavax will probably have to conduct at least one additional late-stage trial to win over regulators in the U.S. and perhaps the EU as well. ResVax, after all, badly whiffed on its primary endpoint in this same late-stage trial last February. Put simply, Novavax may ultimately be able to salvage ResVax if this new analysis holds up to scrutiny, but investors shouldn't hold their collective breath that a major regulatory win is close at hand.