What happened?

Shares of Novavax (NASDAQ:NVAX) are down by 5.9% as of 11:29 a.m. EDT on Friday -- after plunging by more than 10% earlier today -- and this despite the company not reporting any news. However, we can probably attribute Novavax's slump today to the overall decline of the stock market. With confirmed cases of COVID-19 spiking in several states, renewed fears surrounding the prolonged effects of the pandemic are causing many investors to take their money out of the stock market.

So what

Novavax has been at the forefront of the development of a vaccine for COVID-19. And as a result of its efforts, the company's stock has skyrocketed. Novavax's shares are up by about 1,800% year to date. These returns obviously compare favorably to those of the broader market; for that matter, they compare favorably to the performance of most other companies working on developing vaccines for the coronavirus. For instance, shares of Moderna (NASDAQ:MRNA) are up by a comparatively mild 207% since the beginning of the year. Now that a second wave of COVID-19 cases seems to be on its way in some states, though, some investors may be choosing to cash out their investments in Novavax. 

Man holding his head in panic, with downward pointing graph on the background.

Image source: Getty Images.

Now what

Novavax's stock will continue to be highly volatile in the short term. A lot of companies are looking to develop vaccines for COVID-19, and it's impossible to know at this point which one will cross the finish line first. But Novavax has another potential catalyst on the way. The biotech company recently reported positive results from a phase 3 clinical trial for NanoFlu, a potential flu vaccine for adults 65 and older. Novavax will seek regulatory approval for this vaccine soon, and if it is approved, the company's stock could see even more gains.