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Why Dynavax, Novavax, and Sorrento Soared This Week

By Keith Speights – Aug 13, 2021 at 6:01AM

Key Points

  • Novavax rebounded from last week's sell-off with a leak about the pricing of its EU supply deal.
  • Dynavax's momentum continued after a strong Q2 earnings report last week.
  • Sorrento announced a couple of new developments for its COVID-19 vaccine program.

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There were different reasons behind each of these COVID-19 vaccine stocks' big gains.

What happened

Several stocks of companies hoping to make a big splash in the COVID-19 vaccine market soared this week. Shares of Novavax (NVAX -1.96%) were up 29.6% as of the market close on Thursday. Dynavax Technologies (DVAX 1.44%) stock jumped 19%. Sorrento Therapeutics (SRNE 2.44%) shares rose 9.8%.

Novavax rebounded from a sell-off last week after the company announced it was delaying the U.S. Emergency Use Authorization filing for COVID-19 vaccine candidate NVX-CoV2373 until the fourth quarter of 2021. On Wednesday, Denmark stated that it planned to buy 280,000 doses of NVX-CoV2373 for nearly $21 per dose.

Dynavax continued to enjoy momentum from its strong Q2 earnings report last week. Analysts also remain bullish about the stock with a consensus price target reflecting a premium of more than 45% above the current share price.

Sorrento had a couple of positive developments this week. On Monday, the company presented an overview of its messenger RNA (mRNA) COVID-19 vaccine development program. On Wednesday, Sorrento announced a deal to license Dyadic's lead COVID-19 vaccine candidate DYAI-100 and C1-cell protein production platform.  

Gloved hand holding a vaccine vial and syringe with scientists, a microscope, and test tubes in the background.

Image source: Getty Images.

So what

The quality of the catalysts for these vaccine stocks this week varies. It probably makes sense that Novavax delivered the biggest gain.

Denmark's order of 280,000 doses isn't a big deal. However, the country inadvertently revealed the price tag that's applicable for the overall supply deal between the European Union and Novavax. That deal includes 100 million doses plus an option for an additional 100 million doses. Novavax stands to receive at least $2.1 billion and perhaps up to double that amount from its EU agreement. 

Dynavax's continued uptrend also is understandable. The company just reported the best quarter ever for hepatitis B vaccine Heplisav-B. Revenue from its CpG 1018 adjuvant is also growing. 

Of these three high-flying stocks this week, Sorrento arguably had the least impressive catalysts. The company's mRNA vaccine presentation didn't give investors any new information about the timing of progress for the program. Sorrento's licensing agreement with Dyadic hasn't been finalized yet. And it's for a program that hasn't advanced into clinical testing.

Now what

Novavax hopes to file for EUAs of NVX-CoV2373 in the U.K. in the third quarter with regulatory filings in the EU, Australia, Canada, and New Zealand coming within the following weeks. The company could win authorizations in India, Indonesia, and the Philippines even sooner.

Dynavax's upcoming milestones include a Centers for Disease Control and Prevention advisory committee vote in October on recommending hepatitis B vaccination for previously unvaccinated adults. Several of the company's partners using the CpG 1018 adjuvant should report clinical results by the end of the year as well.

Sorrento has plenty of irons in the fire. The company received a green light from the U.S. Food and Drug Administration to initiate a phase 1 study evaluating a cell therapy candidate in treating multiple myeloma. It's continuing a phase 2 study in the U.K. evaluating an experimental COVID-19 antibody therapy. Sorrento also plans to soon begin marketing COVID-19 tests in Mexico.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Novavax Stock Quote
$16.52 (-1.96%) $0.33
Dynavax Technologies Stock Quote
Dynavax Technologies
$12.72 (1.44%) $0.18
Sorrento Therapeutics Stock Quote
Sorrento Therapeutics
$1.26 (2.44%) $0.03
Dyadic International, Inc. Stock Quote
Dyadic International, Inc.
$1.50 (%)

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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