Please ensure Javascript is enabled for purposes of website accessibility

Why Novavax Shares Rose 110% in February

By Adria Cimino - Mar 5, 2020 at 5:20AM

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

Investors bet on Novavax’s coronavirus vaccine program.

What happened

Shares of Novavax (NVAX 11.12%) rose 110% in February, according to data provided by S&P Global Market Intelligence, as investors bet on companies that may develop a coronavirus vaccine to address the current global outbreak.

As the outbreak deepened, with COVID-19 coronavirus cases topping 93,000 worldwide, investors flocked to shares of companies working on -- or with technology to work on -- treatment and prevention. Novavax announced details of its program on Feb. 26, saying it is now examining several nanoparticle vaccine candidates in animal studies. Once the company chooses the best candidate, it aims to begin testing in humans by the end of spring.

Vials of vaccine solution, labeled 'Coronavirus Vaccine,' sit on a surface.

Image source: Getty Images.

So what

For a late-stage biotech company focused on vaccines, developing a coronavirus vaccine could be a big win. Novavax has already demonstrated the strength of its technology in preclinical testing of vaccines for Middle East respiratory syndrome and severe acute respiratory syndrome. That said, Novavax has more to gain through its development of a seasonal flu vaccine -- in phase 2 testing -- and respiratory syncytial virus (RSV), which is in phase 3 testing. Seasonal flu and RSV, a respiratory virus that causes cold-like symptoms, represent bigger long-term markets. The global flu vaccine market, growing at a compound annual growth rate of 7.7%, is expected to reach $7.3 billion by 2026, a report by Fortune Business Insights showed.

Now what

As long as the coronavirus outbreak continues, it's likely investors will monitor Novavax's vaccine development and the shares will benefit. That said, once the outbreak is over, the shares may lose the upward momentum. Long-term investors might want to watch and wait on this one and take a closer look at the company's entire pipeline before considering shares of this biotech company.

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.
$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
S&P 500 Returns

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.