What happened

Shares of Novavax (NVAX 8.40%) are 7.2% lower as of 2:04 p.m. ET on Friday, fully wiping away gains logged early in the week following the approval and subsequent endorsement of its COVID-19 vaccine.

So what

On the surface, the tumble seems counterintuitive. Many unvaccinated U.S. residents have reportedly been holding out for a coronavirus vaccine that isn't RNA-based. Novavax's protein-based NVX-CoV2373 is such a solution, approved by the Food & Drug Administration for emergency use over a week ago, and unanimously recommended by the U.S. Centers for Disease Control's Advisory Committee on Tuesday of this week.

Shares even moved higher (albeit briefly) in response to the news. When all is said and done, though, this week's gains weren't meant to be held.

Three overarching reasons for Friday's pullback -- extending weakness that's been in place since September of last year -- stand out. One is side effects: While NVX-CoV2373 demonstrates 90% efficacy in muting the impact of infections, adverse side effects like pain and fatigue were quite common, and not insignificant.

Another reason is the question of need. While Novavax's vaccine is aimed at the Omicron variant of the virus and all of its sub strains, the continued proliferation of COVID-19 is more opportunity for the disease to continue mutating. The latest variant, BA.5, is highly resistant to immunity achieved by prior infections as well as existing vaccines. It's also one of the most easily spread versions of the virus, undermining confidence that NVX-CoV2373 will do much good when it starts being distributed next week.

Perhaps more than any other reason, though, investors appear to have lost as much interest in chasing vaccine revenue as individuals have lost in worrying about the pandemic itself.

Now what

Don't misread the message. There's a market for NVX-CoV2373, and like so many of its pharmaceutical peers, Novavax is certainly going to work on future-proofing its vaccine portfolio.

The failure of NVAX shares to follow through on any of its rally efforts of late, however, is indicative of the bigger problem this company still faces. That is, without COVID-19 vaccines, it has no other meaningful revenue source, and demand for COVID-19 vaccines (any of them) is waning despite rekindled growth of the pandemic. Wise investors will take the hint that the stock itself is dropping.