What happened

Shares of Novavax (NVAX -9.65%) were sinking 9% lower as of 11:23 a.m. EDT on Tuesday after dropping nearly 14% on Monday. The reason behind today's decline appears to be the same as it was yesterday: Investors are concerned that another COVID-19 vaccine could receive emergency use authorization (EUA) in October. A Financial Times article published on Sunday reported that the Trump administration was considering fast-tracking the COVID-19 vaccine being developed by AstraZeneca and the University of Oxford. 

So what

On one hand, it doesn't make sense why investors would sell off Novavax shares on worries about another COVID-19 vaccine making it to market sooner. After all, Novavax only started a phase 2 clinical study of its coronavirus vaccine candidate NVX-CoV2373 yesterday. Several drugmakers are already in phase 3 testing with their COVID-19 vaccine candidates. No one expected Novavax to be the first to market with its vaccine.

Gloved hand picking a COVID-19 vaccine bottle from a line of similar bottles

Image source: Getty Images.

However, Novavax's market cap of around $6.6 billion is still pretty steep considering the company doesn't have any approved product on the market yet. Any news that could be construed as bad in any way for its prospects is likely to cause the biotech stock to fall. That's what we've seen happen this week.

These downswings are merely noise, though. The important thing to watch with Novavax is how NVX-CoV2373 performs in phase 2 testing.

Now what

Novavax plans to enroll up to 1,500 healthy volunteers in its phase 2 study at as many as 40 sites in the U.S. and Australia. Roughly half of those participants will be ages 60 and older. That's important since older individuals are at greater risk with COVID-19. The company expects to report interim data from this study in the fourth quarter of 2020.