Many investors get in on the stock market to accumulate enough capital for their golden years, and with good reason. With enough patience and discipline, investing in stocks can help the average person acquire a hefty sum of money -- say, a million dollars -- by the time retirement hits.
Naturally, choosing the right stocks to invest in is critical to accomplishing this goal, as not all securities are created equal. With that in mind, let's look at biotech company Novavax (NVAX 3.50%). Can this vaccine maker help investors retire as millionaires?
A potential catalyst on the way
Novavax is perhaps best known for its coronavirus-related work. The company's vaccine against the disease, NVX-CoV2373, proved nearly 90% effective against all current COVID strains in a phase 3 clinical trial conducted in the U.K. That is on par with the results some of the leaders in the COVID-19 vaccine market delivered. Over the past few months, NVX-CoV2373 has earned regulatory approvals or Emergency Use Authorization (EUA) in many countries, including those in the EU.
However, NVX-CoV2373 has yet to gain EUA in the U.S. Thankfully, that could happen within a couple of months. In late January, Novavax completed the filing of an application for EUA for NVX-CoV2373 in the U.S. On April 29, the company announced an advisory committee of the U.S. Food and Drug Administration (FDA) would review its application in a meeting planned for June 7.
The meeting itself is no guarantee that NVX-CoV2373 will be approved, but it will at least take away some uncertainty from investors' minds. Whether positive or negative, the advisory committee's opinion will tell us a lot about whether the FDA is likely to grant NVX-CoV2373 EUA.
It seems likely that the agency will give the green light to the vaccine. After all, regulators in the U.S. had previously said that those who had received two doses of NVX-CoV2373 as part of a late-stage clinical trial should be considered fully vaccinated. If NVX-CoV2373 does earn a nod from U.S. regulators, it could be a catalyst that sends Novavax's shares higher.
The long-term view
While we have made progress in fighting the COVID-19 pandemic, it is most definitely not over. If granted EUA in the U.S., Novavax could carve out a decent niche in this market. Here's one reason why. According to a February poll conducted by research and analytics company The Harris Poll, nearly three-quarters (73%) of people in the U.S. would like to have COVID-19 vaccine options that are developed from more "traditional" methods, such as those that have been used for decades in children and adults to prevent diseases like mumps and polio.
The poll was commissioned by biotech company Ocugen, which is hoping to earn approval for its own COVID vaccine candidate, Covaxin. Both NVX-CoV2373 and Covaxin fit the more traditional mold of developing vaccines, while other market leaders -- like Pfizer's Comirnaty, for instance -- do not. Comirnaty is an mRNA-based vaccine, which is a relatively new approach to developing vaccines. If this poll is correct, both Covaxin and NVX-CoV2373 are likely to find some success in the market.
However, while Covaxin is nowhere close to earning a regulatory nod in the U.S., that could happen for Novavax relatively soon. Further, even if the full-blown phase of the pandemic ends, some experts believe the virus could become endemic.If that happens, vaccines would still be needed -- and perhaps for a while. In addition to NVX-CoV2373, Novavax is working on another candidate that specifically targets the omicron variant of the coronavirus. The company also has a combined flu and COVID-19 vaccine in the works.
Other exciting candidates in Novavax's pipeline include a potential vaccine against malaria in a phase 2b study and an investigational Ebola vaccine in a phase 1 study. Of course, Novavax's most important program other than NVX-CoV2373 is arguably its potential flu vaccine, NanoFlu. While this candidate took a back seat once the pandemic started, Novavax reported positive results from a late-stage study for NanoFlu as far back as March 2020.
Expect Novavax to earn significant clinical and regulatory wins in the next five years and generate solid revenue and earnings from here on out. The company expects revenue between $4 billion and $5 billion this year, compared to the $1.1 billion in revenue it reported last year; that's right in line with analysts' average prediction of $4.49 billion.
Also, analysts expect Novavax's earnings per share to come in at $22.74 in 2022, compared to its 2020 net loss per share of $23.44. In my view, Novavax has a bright future thanks to a key blockbuster product that will help it generate the funds it needs to push its exciting pipeline forward. For investors willing to be patient, this biotech stock can aid in helping one retire a millionaire.