Should You Still Have Appetite For Novavax, Inc. (NASDAQ:NVAX) Stock?


Novavax, Inc. (NASDAQ:NVAX) released clinical trial results that the market was not prepared to hear and the stock reversed and then crashed.

In the last three months, Novavax, Inc. (NASDAQ:NVAX) stock has risen more than 25%, driven by optimism in the company’s pipeline. But the stock is rapidly giving up those gains amid a selloff sparked by disappointing pipeline outcome.

Respiratory disease vaccines disappoints

Novavax released data from a Phase 3 study of its respiratory disease vaccine known as RSV F Vaccine. Among subjects enrolled in the study were people aged 60 years. Infants were also included.

After analysis the study data, Novavax, Inc. (NASDAQ:NVAX) came to the unfortunate conclusion that the trial neither meet primary nor secondary study targets. The primary endpoint of the Phase 3 trial of RSV F Vaccine focused on the ability of the drug to prevent respiratory tract disease.

Was anything wrong with the study?

Though the outcome of the so-called RESOLVE Phase 3 study came as a surprise and disappointment for Novavax, the said it didn’t detect any problem with the trial execution or handling of the data. Despite the setback, Novavax maintains that it still has hopes with RSV F Vaccine. In fact, it models that if successful, peak sales of RSV F Vaccine would be in the vicinity of $6 to $8 billion. That’s huge revenue potential for a company that currently doesn’t have a marketable product.

In another disappointing note, a ROLLOVER Phase 2 trial of the candidate failed to meet the study goals. Novavax, Inc. (NASDAQ:NVAX) was looking to evaluate singe immunization efficacy of the drug, but didn’t see any positive sign there. However, the company said that there is a possibility for the drug to impress in a second immunization.

The reason investors might still have hope with Novavax, Inc. (NASDAQ:NVAX) is that the company has a rich pipeline. Other candidates in Novavax’s pipeline include Ebola and flu vaccines.

Though Novavax doesn’t have a marketable product, the company still managed to generate revenue of $36.3 million in 2015 from contracts with organizations such as BARDA.


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