Please ensure Javascript is enabled for purposes of website accessibility

Why Novavax Stock Crashed Today

By Joe Tenebruso – Aug 6, 2021 at 5:38PM

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

Production challenges are slowing the drugmaker's entry into the lucrative U.S. COVID-19 vaccine market.

What happened

Shares of Novavax (NVAX -2.02%) plunged 19.6% on Friday after the biotech delayed its plans to seek emergency use authorization for its coronavirus vaccine candidate.

So what

Novavax had previously hoped to obtain regulatory clearance by May, before delaying its timeline to the third quarter. The company now expects to submit its application to the U.S. Food and Drug Administration (FDA) in the fourth quarter. 

The delays have likely cost Novavax the potential for billions of dollars of sales, which have instead gone to rival vaccine makers like Pfizer and Moderna.

A downwardly sloping stock chart.

Novavax's stock price fell sharply on Friday. Image source: Getty Images.

Novavax CEO Stanly Erck told Yahoo Finance that the later timeline is due to production challenges. Novavax was instructed to work with certain manufacturers as part of Operation Warp Speed, a government-run program designed to accelerate the development of COVID-19 vaccines and treatments. One of those manufacturers is struggling with quality control issues, which has temporarily halted production. 

Now what

Investors are understandably disappointed by these delays. However, the battle against COVID-19 is unlikely to be won this year. Health officials are warning that the disease could become endemic and that booster shots could be necessary to protect against new variants. Thus, the need for safe and effective coronavirus vaccines is likely to remain strong for the foreseeable future. So, if Novavax can obtain an emergency use authorization for its drug by the end of the year, it could still generate sizable vaccine-related profits in the coming years.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 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 Stock Quote
$16.49 (-2.02%) $0.34

*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 analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

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

Premium Investing Services

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