One of the best-performing biotech stocks so far this year is Novavax (NVAX +4.35%). Despite not being that well-known of a company going into 2020, the company has seen its stock price rise by an astonishing 3850%. As one of the many promising COVID-19 vaccine developers out there, it's not surprising that the stock has shot up so much in such a short period of time.
Just recently, Novavax released new clinical data surrounding its promising vaccine, news that sent the stock jumping even further. With the company's prospects looking better than ever, should on-the-fence investors get in on this biotech company before shares rise even more? Let's find out.
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Diving into the results
While its COVID-19 vaccine is still in the early stages of clinical development, positive news from Novavax's phase 1/2 trial was met with a lot of excitement. The trial involved 131 healthy adults, featuring two different dose levels for the company's vaccine candidate, NVX-CoV2373. All patients involved in the trial saw significant increases in neutralizing antibodies compared to patients who had naturally recovered from COVID-19.
As for adverse reactions, they were quite mild across the patients tested. While both the lower dose and the higher dose were well-tolerated by patients, the higher dose did elicit a stronger response in terms of side effects, the worst of which being headaches and fatigue that subsided quickly.
What makes Novavax's approach different from that of the other vaccine makers out there is its unique nanoparticle technology. More specifically, the company has developed a highly effective immune response enhancing technology called Matrix-M, which is used as an ingredient in vaccines (also known as an adjuvant) to help improve the recipient's immune response.
Don't forget about Nanoflu
Although it's easy to get wrapped up in the company's COVID-19 vaccine, Novavax also has a highly promising nanoparticle flu vaccine in the works as well: NanoFlu.
Despite initial skepticism, the clinical data so far has been resoundingly positive. Back in March, NanoFlu passed all of its primary and secondary endpoints in a phase 3 trial, while handily outperforming the current leading flu vaccine, Fluzone, which was developed by Sanofi.
While not as newsworthy as the coronavirus, the flu is still a big deal. Around 500,000 hospitalizations occurred due to the disease in the U.S. last year, which resulted in around 34,000 deaths. Considering that the flu vaccine market is expected to reach a size of $6.2 billion by 2026, that's a big opportunity for NanoFlu to capitalize on.
What should investors do?
While Novavax's treatment is promising, there are still over 160 other coronavirus vaccines either in development or undergoing clinical testing right now. To say there's plenty of competition is an understatement. Other companies like Moderna, AstraZeneca, and Pfizer all have vaccine candidates that are currently in late stages of clinical testing.
Many companies have a significant head start on Novavax, which has yet to start its own phase 3 trials for NVX-CoV2373. Even if Novavax's COVID-19 vaccine does extremely well in terms of clinical results, not being one of the first few vaccines to hit the market could lead to NVX-CoV2373 making less money for the company than some investors might expect.
Regardless of how well its COVID-19 vaccine does, however, Novavax's extremely promising NanoFlu has the potential to be a blockbuster in and of itself. Some analysts predict that NanoFlu could bring in at least $550 million in yearly sales for the biotech company. That's a big deal for a company whose first-quarter revenue was around $3.4 million.
The way I see it, Novavax has two good chances to hit a financial home run. Both its COVID-19 and its NanoFlu vaccine have the potential to make a fortune for Novavax, and send the stock soaring. Either way, investors who haven't already added Novavax to their portfolios would do well do to so before the stock rises even further.
