Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Novavax Inc Are Surging Higher Today

By Brian Feroldi – Sep 30, 2015 at 11:45AM

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

Positive phase 2 data and an $89 million grant sent the vaccine maker's stock higher.

What: Shares of Novavax (NASDAQ: NVAX) a clinical-stage biopharmaceutical company focused on creating vaccines for infectious diseases, jumped more than 17% in early trading today on heavy volume after the company released updated clinical information on its Respiratory Syncytial Virus, or RSV, vaccine.

So what: Yesterday, the company held its third annual analyst and investor meeting, at which time the company reported positive top line data from its phase 2 clinical trial of its RSV F vaccine's ability to protect infants via maternal immunization. In the trial, the company reported that the vaccine was safe, transferred effectively from mother to infant, and generated a significant antibody response.

In a separate announcement, Novavax revealed that the Bill & Melinda Gates Foundation awarded the company with a grant worth up to $89 million to support further development of its RSV F Vaccine. The company plans to initiate Phase 3 clinical trial during the first quarter of 2016.

Now what: While this clinical update was certainly positive, the market has manhandled Novavax's stock over the past couple days. The market initially bid the stock up after the news was released yesterday, then went on to sell shares off hard. Today's jump appears to be the market coming to its senses and is so far sending shares higher on the positive announcement.

RSV remains a very serious problem around the world that hits infants and young children worldwide especially hard. An estimated 64 million patients contract the disease every year, and more than 160,000 of them actually die as a result. If Novavax is successful in developing a vaccine, it could certainly go a long way to boosting the health of millions of people around the world.

The market's recent craziness has caused shares to fall nearly 35% in the past month alone, but considering these great results and the rest of the company's pipeline, it might be a good time to considering adding this name to the more speculative portion of your portfolio.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Premium Investing Services

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