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What Should Novavax Investors Make of the CDC's Latest Guidance?

By Keith Speights and Brian Orelli, PhD – Sep 10, 2021 at 6:52AM

Key Points

  • The CDC will allow fully-dosed participants in Novavax's COVID-19 vaccine clinical studies to be considered as fully vaccinated.
  • This updated guidance is helpful for study participants but doesn't make a big difference for the company.

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The CDC had great news for participants in Novavax's clinical studies, but it wasn't very important for Novavax itself.

The U.S. Centers for Disease Control and Prevention recently provided updated guidance. And it was good news for participants in Novavax's (NVAX 2.18%) clinical studies for its COVID-19 vaccine candidate. In this Motley Fool Live video recorded on Sept. 1, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss what Novavax investors should make of the CDC's guidance.

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Keith Speights: The CDC recently provided updated guidance for participants who are in clinical trials of COVID-19 vaccines. Novavax, ticker there is NVAX, issued a public statement on Monday of this week praising this new guidance.

Brian, what did the CDC say? Is there really much of a story here for Novavax investors?

Brian Orelli: Yes. The CDC said people who were in Novavax's clinical trial who got the vaccine should be considered fully vaccinated. Not the people got placebo, though presumably most of the people who got placebo, went back and got the vaccine after it was offered to them. If you got the vaccine either through the initial tests or through switching from placebo to vaccine, you're considered fully vaccinated.

I'm assuming the statement was put out because more and more places are requiring proof of vaccinations. Obviously employers, but we had to show proof of vaccination to avoid needing to get tested before flying to Hawaii. Someone on my daughter's volleyball team tested positive, and the procedure for the league is that vaccinated kids can still play even if somebody on their team tests positive. She had to prove that she had been vaccinated to be able to play and practice and play in the games.

The CDC announcement can be seen as an endorsement of Novavax's vaccine. They basically said, "If the independent data monitoring committee says that the vaccine worked, we think that that should be considered fully vaccinated."

But that's never really been in question for Novavax. The efficacy hasn't really been the company's problem. I don't really see this as really that big of a benefit to Novavax. What the company really needs to do is get its manufacturing setup in order so that it can gain authorizations in various countries around the world.

That should be what investors should really be focused on, not that the CDC basically said, "Yeah, we think that this vaccine works." Because I think everybody thinks this vaccine works, and that's probably not the issue here.

Speights: The stock did rise some on this news, but I think more than anything is there's just some built-in volatility with Novavax right now, and any positive story is going to make the stock go up, any negative news is going to make the stock go down some.

This was at least marginally positive, right? Especially because the CDC only singled out Novavax. It had this updated guidance, but it really only mentioned Novavax by name on this.

Of course, that just reflects that Novavax has pretty much not completed, but its phase 3 study, it's already given some results, and it's preparing to file for Emergency Use Authorization in the U.S. I think it was a feather in Novavax's cap that the company was singled out, but probably not really that big of a deal for the stock itself.

Orelli: I'm a shareholder, [laughs] I enjoyed the slight gain, but I'm not really convinced that it was really warranted, but as you said, there's a lot of volatility in Novavax's stock. It's gone up quite a bit and gone down and I'm still up compared to where I bought before the phase 3 data that came out, but it's certainly been a roller-coaster ride.

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.

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