What happened

Shares of Novavax (NVAX -3.63%) were slipping 6% lower as of 10:57 a.m. EDT on Tuesday. The biotech hadn't announced any news that would cause the decline. Instead, today's move appears to be a continuation of the sell-off that began in mid-August. 

So what

Why has the biotech stock been on a downward trajectory for several weeks? Probably because a sizable number of investors decided to take profits off the table. After all, Novavax's share price skyrocketed nearly 4,400% in early August.

Four COVID-19 vaccine bottles with two toppled over

Image source: Getty Images.

But the company has continued to deliver reasons to be cautiously optimistic about its prospects. On Monday, for example, Novavax announced that it had reached an agreement in principle with the Canadian government to supply up to 76 million doses of COVID-19 vaccine NVX-CoV2373. This followed another major supply deal with the United Kingdom announced on Aug. 14. 

These agreements, however, hinge on NVX-CoV2373 achieving success in further clinical studies and winning regulatory approvals or authorizations. Novavax initiated a phase 2 study of its COVID-19 vaccine candidate last week.

Now what

Novavax's shares will likely remain volatile. The best thing for investors to do is to ignore this volatility and stay focused on the company's clinical progress. Novavax expects to report interim results from its phase 2 study in the fourth quarter of this year. The company hopes to file for U.S. regulatory approval in December.