Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Novavax Stock: Buy at the High?

By Jason Hawthorne - Dec 13, 2020 at 11:11PM

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

Two delays should have investors thinking twice about buying the stock.

Of all the rags to riches stories that the pandemic has fueled for drugmakers, few are as incredible as Novavax ( NVAX -9.15% ). Shares are up about 2,500% from the beginning of the year. After the surge, should investors pass or should they buy at the high?

A doctor holding a vial of COVID-19 vaccine.

Image source: Getty Images.

Excitement and frustration

Admittedly, the stock isn't near it's all-time high. Shares peaked around $180 briefly this summer, after the company became part of the U.S. government's Operation Warp Speed (OWS) and management announced positive phase 1 data from trials of its vaccine candidate.

Twice since then, there have been delays in getting the phase 3 trials started in the United States. With the stock still up, investors are betting that the drug will steal share from the COVID vaccines from Pfizer ( PFE -1.98% ) and Moderna ( MRNA -4.54% ) that require storage at much colder temperatures. The Novavax candidate only requires normal refrigeration.

A waiting game

The company was in one of the best positions when the pandemic began. Novavax had active programs to develop vaccines for both SARS and MERS, two viruses similar to the SARS-CoV-2 virus that causes COVID. SARS and MERS were associated with outbreaks in 2003 and 2015, respectively. After the delays, management now says the phase 3 trial in the U.S. will begin "in the coming weeks." 

Investors probably aren't the only ones who hope that's true. OWS has funded the company to the tune of $1.6 billion, some of which the company has turned into new office space and land near its current headquarters. Until we get a sense of when a Novavax vaccine might be available, and how effective it is, I am not buying at the highs. I believe shares will fade as investors realize the bulk of the 2021 opportunity is passing the company by.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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.
NVAX
$175.03 (-9.15%) $-17.62
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$53.60 (-1.98%) $-1.08
Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$296.51 (-4.54%) $-14.10

*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 service.

Stock Advisor Returns
635%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/02/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.