Novavax (NASDAQ: NVAX) represents the investment of dreams. Earlier this year, you invest in an interesting clinical biotechnology deal at less than $ 5 a share. Then, in a matter of months, positive news about investigative products raises the price of its shares. And at the end of the year, he is the best performer in the entire market.
Novavax started 2020 with $ 3.98 per share. From there, he skyrocketed more than 2,700 percent optimism about his potential coronavirus vaccine, as well as the promise of his flu shot candidate. So, how much would you have now if you had invested $ 1,000 in Novavax in January? Let’s do the math.
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About 252 shares
With $ 1,000, you would have bought about 252 shares at the closing price on December 31, 2019. Today, the shares are trading at around $ 116. This means that your investment would be worth $ 29,232. And if you had locked in your earnings on your August high of around $ 178 per share, you would have made a profit of $ 43,856.
Now, you may wonder what the chances are of Novavax extending its strong rise until 2021. In the past few days, stock prices for several vaccine manufacturers have fallen. Investors are concerned that current vaccines and candidate vaccines will protect against a new variant of COVID-19 that has been detected in the UK Modern (NASDAQ: MRNA) and Pfizer (NYSE: PFE), both authorized to sell their vaccines in the United States, are optimistic. And they started new studies to confirm the effectiveness of their inoculations against the mutated strain, according to press reports. If the results of these studies are positive, stocks of vaccines against coronavirus should recover. Pfizer and Moderna said they expected their vaccines to be effective against several strains, including the most recent.
In addition to this short-term issue, Novavax has many catalysts for the stock price to come.
In September, the company launched a phase 3 trial in the UK for its candidate vaccine against coronavirus. He hopes to be able to report the interim results of that study early in the first quarter of 2021. These results can support his requests for emergency use authorizations from health regulators in several countries. If Novavax follows a similar schedule to Moderna and Pfizer, it will be able to place these orders from the US in the first quarter. This could lead to a marketing authorization in the coming weeks.
This week, Novavax announced the start of a second phase 3 trial for its experimental coronavirus vaccine. This study is based in the USA and will enroll up to 30,000 participants.
Novavax is also preparing to apply for FDA approval for NanoFlu, its experimental flu vaccine. This year NanoFlu met all of the primary outcomes in a critical clinical trial, so it is reasonable to be optimistic about your chances.
Reason for long-term gains
If Novavax obtains emergency use authorization for its candidate coronavirus vaccine or a standard regulatory approval for NanoFlu, its actions are likely to jump immediately. But in addition to these two catalysts, there are reasons to expect a long-term stock price hike. At the moment, Novavax has no product revenue. Therefore, two products reaching the commercialization stage in a short time would be a big deal.
But Novavax is also exploring the possibility of combining its flu and coronavirus vaccines into a single injection. This can change the game for two reasons. First, it means less jabs. Most people prefer to take a chance instead of more. Second, for doctors and healthcare systems, a combined injection would streamline the vaccine administration process – from transport and storage to inoculation. Still, we must keep in mind that this is still a long way off. The company did not offer a schedule, but in October Novavax announced its “exploitation” of this vaccine. This means that a candidate must still be developed and submitted to pre-clinical and clinical tests. On a traditional schedule, this can take years.
Novavax’s estimated earnings per share for the next fiscal year are $ 21.57. This is more than double the rival Modern. If Novavax does reach that level or more – and outperform its peers – positive stock performance is likely to occur.
EPS estimates from NVAX for next fiscal year data by YCharts
So there are certainly elements that can boost Novavax’s stock in the next year – adding to the 2020 earnings. While this is exciting, keep in mind that the stock remains risky.
The performance of Novavax’s stock price next year will depend on the results of its coronavirus vaccine studies. Anything can happen in clinical trials – and many drugs and vaccines do not pass the final stage. Bad news on that front could make Novavax’s shares plummet. This stock of biotechnology offers potential for large additional gains, but also potential for significant losses. You should only invest in it – or maintain your current position – if you are comfortable with that idea.