You have to be brave to earn 2,900% in one year.
Novavax (NASDAQ: NVAX) started 2020 in a deep, dark hole. That’s because 2019 was a horrible year for the company. When biotechnology reported disappointing results from its phase 3 trial for ResVax, a vaccine for respiratory syncytial virus (RSV) in babies, the market dropped the stock. Shares traded for cents. Novavax’s valuation dropped so much that the company had to reverse its 1 to 20 split to continue trading on the Nasdaq Stock Exchange. As of December 31, 2019, the shares had fallen to $ 4 each.
What a difference a year makes!
Image source: Getty Images
Earlier this year, Novavax’s hopes revolved around NanoFlu, a flu vaccine. Success! Not only did he report fantastic data from his phase 3 flu study, but simultaneously, small biotechnology emerged as one of the leaders in the race to vaccinate the world against a new threat, COVID-19.
Small biotechnology has received nearly $ 2 billion in funding from government and nonprofit sources. And then Novavax reported positive data from an initial trial for its COVID-19 vaccine. This development has made stocks soar incredibly.
NVAX data by YCharts.
It is now December 2020. Investors are awaiting the results of phase 3 testing of the coronavirus vaccine. Positive data will cause Novavax’s stock to skyrocket further, while any bad news will bring the stock down.
Even so, long-term shareholders can relax. Novavax now has a lot of money, and the Food and Drug Administration’s approval for its flu vaccine is highly likely. Therefore, investors have a good safety net if the coronavirus vaccine is disappointing, while the potential upside is incredible.