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Why Novavax Stock Is Soaring Today

By Keith Speights - Feb 26, 2020 at 10:59AM

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Investors are excited about the biotech's progress with its coronavirus vaccine program.

What happened

Shares of Novavax (NVAX 2.80%) were up 18.1% as of 10:32 a.m. EST on Wednesday after rising as much as 41% earlier in the day. The big jump came after the biotech announced plans to begin clinical testing by late spring for an experimental vaccine to protect individuals against COVID-19, the disease caused by the novel coronavirus that's causing major health concerns across the world.

So what

Investors are understandably encouraged by Novavax's news. The biotech has solid experience with developing vaccines, including some that target other coronavirus-related illnesses such as MERS and SARS. This background enabled Novavax to move quickly to get its COVID-19 program up and running.

Gloved hand holding vial of blood. A label on the vial reads "Coronavirus" and a box next to "Pos." is checked off.

Image source: Getty Images.

It's also promising that Novavax has already produced multiple viable candidates that it's evaluating in animal models. This will allow the company to pick the best vaccine candidate to advance to testing in humans.

Of course, there's still a long way to go. There's also no guarantee that Novavax will be successful with its efforts. However, any progress is good news with the coronavirus continuing to spread.

Now what

Novavax CEO Stanley Erck said that the company plans to first pick the optimal candidate and then scale up its production to support clinical studies. He stated that Novavax is in a good position to begin a phase 1 clinical study of its COVID-19 vaccine candidate in either May or June.

Biotech stocks, especially those of clinical-stage biotechs, can experience huge swings on promising news. However, they can also fall just as quickly if there are any bumps in the road or if a rival has good news of its own. Expect a very high level of volatility with Novavax over the coming months.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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