Please ensure Javascript is enabled for purposes of website accessibility

3 Green Flags for Novavax's Future

By Taylor Carmichael - Jul 10, 2020 at 12:07PM

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

There are good reasons to consider this small biotech an emerging favorite in the COVID-19 vaccine race.

Tiny Novavax (NVAX -5.56%) has emerged as one of the strongest stocks in the first six months of 2020, running up an astounding 2,300%. Most of that surge has been due to excitement about NVX-CoV2373, the company's COVID-19 vaccine candidate. Here are three reasons why the market has been so bullish about Novavax in 2020.

COVID-19 vaccine in gloved hand

Image source: Getty Images

1. Major financial support from major outsiders

Back in May, the global nonprofit Coalition for Epidemic Preparedness Innovations invested $388 million in Novavax's vaccine candidate for COVID-19. Last week, the U.S. government agreed to pay the company $1.6 billion through Operation Warp Speed to help develop it. With almost $2 billion of free money in the bank, Novavax can now easily compete with all the big pharmaceutical players. And at a market cap of under $6 billion, it's trading at less than three times its cash.

2. Better immunogenicity than rival candidates (so far)

In animal models, Novavax's vaccine is producing far more antibodies than any other candidate. And it's not even close. "We are seeing neutralizing titers in the 10,000 range in non-human primates," Gregory Glenn, president of research and development at Novavax said. AstraZeneca and Oxford University are reporting neutralizing antibody titers of around 40 in animal studies, while Sinovac reported neutralizing antibody titers up to 60 in animals. 

3. Novavax has arguably the best flu vaccine

Novavax has proven that its vaccine platform works with NanoFlu, its influenza vaccine candidate that has zoomed through clinical trials, defeating the market-leading vaccine from Sanofi in head-to-head trials. 

With $2 billion in cash and a strong vaccine platform, it might be the odds-on favorite right now.

Taylor Carmichael owns shares of Novavax. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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.
$37.18 (-5.56%) $-2.19

*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 08/19/2022.

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.