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What Are Novavax's Long-Term Prospects?

By Taylor Carmichael and Corinne Cardina - Mar 11, 2021 at 9:00AM

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It's shifting from an unprofitable biotech to a company collecting billions in revenue.

Last year, Novavax (NVAX -7.50%) was one of the strongest stocks in the entire  market. The micro cap ran up from $4 a share in January all the way to $119 in December. Then in 2021, the stock almost tripled after Novavax reported positive phase 3 data in its U.K. study for a COVID-19 vaccine. After hitting $330 a share, investors were whipsawed as the stock price dropped to $149.

Is Novavax stock a buy today? Corinne Cardina, the Bureau Chief for Healthcare and Cannabis at Fool.com, and Motley Fool contributor Taylor Carmichael discuss this vaccine specialist. This segment was recorded live on March 5.

Corinne Cardina: All right, we're going to talk about some biotech stocks. Taylor, let's try to do two minutes on each of these so we have time to get to the last question. I know the time just goes by so quickly. [laughs] We're going to start with Novavax because we've touched on it. This is one that has not yet gotten that FDA authorization, but it does have a COVID-19 vaccine that has given us phase 3 info. What should investors know about Novavax in two minutes or less?

Taylor Carmichael: Novavax has been a great stock. Last year it was the No. 1 or No. 2 stock in the entire stock market. It's been an amazing stock for people. This year it was way up, it doubled quickly after they had positive phase 3 data. And it's been slaughtered, the nice word for it, in the last two weeks, I think. If you have not bought Novavax before, now is a good time to be doing that research there because I mean, this is a company that has billions in revenues that are coming in this year. This is already contracted, because COVID-19 is not being sold to insurance companies, is not being sold to you and me, it's being sold to governments. Governments are making deals with these companies, and all these deals have already been made for the most part. They have locked in revenues for this year. Novavax, we're seeing a transition from an unprofitable company with no drugs on the market. This year they'll definitely have their COVID-19. I think it's a lock for Emergency Use Authorization. They're going to get it and they're going to get it within a couple of months I think.

Cardina: Yes

Carmichael: Not just in the U.S. Novavax has an amazing worldwide network of deals in place. They have got a deal in the U.K., they've got a deal in Australia, they've got a deal in Canada, they've got a deal in the Third World. They're going to make billions this year. The stock's about 50 percent off from its highs, I think.

Cardina: Not to mention they have a flu vaccine that has been proven superior to the flu vaccine that's on the market. They've talked about the possibility of combining. It won't happen this year, but in the long term they could combine flu vaccine with COVID-19 vaccine, which is really an amazing concept.

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