Novavax (NVAX -2.61%) ranks among the hottest stocks on the market so far in 2020. Its shares skyrocketed nearly 4,400% before pulling back over the last two weeks.

Some investors have decided to take some profits off the table with the sizzling biotech stock. They include a few of Novavax's top executives and members of its board of directors. Here's how much stock key insiders at Novavax sold after the stock peaked a couple of weeks ago.

Businessman pointing to sell icon next to buy and hold icons

Image source: Getty Images.

Summing up the sales

On Aug. 20, Novavax submitted regulatory filings to the Securities and Exchange Commission related to stock sales for five key insiders. All of the transactions took place two days earlier on Aug. 18.

Gregory Glenn, Novavax's president of research and development, sold the highest number of shares -- 57,449. These sales raked in well over $8.1 million. 

Novavax's chief legal officer John Herrmann III sold 46,242 shares last week. The value of his two sell transactions totaled nearly $6.7 million. 

Chief business officer and chief financial officer John Trezzino disposed of 42,788 shares of Novavax. These sales generated almost $6.4 million for the executive.

Two Novavax directors also sold some of their shares in recent days. Gary Evans sold 10,500 shares for nearly $1.6 million. Michael McManus Jr. sold 8,000 shares for almost $1.2 million. 

In total, insider sales of Novavax stock last week came to 152,979 shares worth close to $24 million.

Anything to worry about?

Sometimes insider sales can be alarming to other investors. The obvious concern is that people inside a company know about bad news that could be on the way. 

That doesn't appear to be happening in this case. How can we be sure? Three of the five key Novavax insiders bought as many shares as they sold last week. The two exceptions were Gregory Glenn and John Herrmann. Glenn bought 42,696 shares, while Herrmann bought 37,914 shares. However, both transactions still largely offset the two men's stock sales. 

For the most part, these executives and board members are simply selling shares as they exercise options to buy more Novavax shares at lower prices. This keeps their positions in the biotech at the same level as they take advantage of their stock options.

This practice isn't unusual. And it's nothing to worry about. There's no reason to suspect that Novavax insiders are preparing for something bad to happen with the company.

What really matters for Novavax

It's still important to keep your eyes on insider transactions. They can at times provide clues into how optimistic management is about a company's prospects. However, it's far more important to watch clinical updates for a biotech like Novavax.

The company recently checked off a big milestone with its start-up of a phase 2 clinical study of COVID-19 vaccine candidate NVX-CoV2373. Novavax plans to enroll up to 1,500 participants in the U.S. and Australia. Interim results are expected in the fourth quarter of this year. The biotech also has another phase 2 clinical study of its COVID-19 vaccine candidate in progress in South Africa.

If all goes well with this phase 2 testing, Novavax should quickly advance NVX-CoV2373 into late-stage testing. There's a lot riding on success for this pivotal study. Novavax has lined up multiple supply deals for its COVID-19 vaccine that hinge on positive results in phase 3 testing.