Novavax shares fell more than 60 percent from their high in early February. It was able to recover a little recently, but is still well below its all-time high. The reason for the sale was the announcement that the Novavax vaccine will probably not be delivered as quickly as expected.
- Novavax vaccine may not be available until the end of the year or next year.
- Other pharmaceutical companies will likely have distributed most of the cake among themselves by then.
- Novavax has never managed to bring a product to market since it was founded in 1987.
- Still, Novavax stock could be worth speculating as the vaccine rests on an entirely different basis.
Novavax News caused the crash
Novavax, a US pharmaceutical company that specializes in the development of vaccines , had raised high hopes among investors.
The Novavax vaccine should be extremely effective (over 96 percent) and be protein-based. It has now been announced that the approval and delivery of the Novavax vaccine will probably take longer than expected.
News about delays in production, approval and thus also delivery caused the price of the Novavax share, which is listed on the NASDAQ, to plummet.
Buy Novavax shares: forecast, pros and cons
Although Novavax has been around since 1987 , the company has never managed to get a vaccine (or any other product) approved for marketing . That is remarkable (in a negative sense)!
Nevertheless, a few points should be discussed below that speak in favor of buying Novavax shares as well as against them.
That Speaks for it
Protein-based vaccines or dead vaccines such as Valneva could be an alternative for people who reject mRNA-based vaccines. The vaccines from Pfizer, Moderna and BioNTech are all based on mRNA technology.
If Novavax manages herein leadership to assume that they could consistently generate profits with their vaccine.
Novavax shares Nasdaq
Novavax tries to open up new markets, especially in developing countries.
The Novavax vaccine also appears to be safe and extremely effective . In addition, it is also highly effective against coronavirus mutations.
Apart from Corona, Novavax is also researching other vaccines, for example against flu . There are also promising developments there.
- Novavax vaccine is protein-based and offers an alternative to the previous mRNA vaccines.
- Apart from that, the company is also researching and developing other vaccines.
- Novavax focuses on markets that can spend comparatively little money on vaccines.
Interesting Novavax news could lead to rising prices in the longer term. The company is well aware that they may no longer achieve any significant market share in the attractive US market.
CEO Stanley Erck said in the context of the earnings call:
«We anticipate that even with the first products to sell at low prices, we will be able to use revenue from higher-income countries to generate enough cash flow to grow our business quickly.»
In this context, Novavax had already signed an agreement with COVAX for 1.1 billion vaccine doses at the beginning of the year . There is of course enormous potential here, but so far only in theory.
That speaks against it
Even if some experts assume that a Novavax vaccine will now be approved for the first time in the wake of the corona pandemic, it is more than questionable whether this will be the big hit .
The competition , such as Pfizer and Moderna has already vaccinated more read 30 percent of the US population.
The US government has already ordered 110 million cans from Novavax. But if these are not delivered until the end of the year, there will be no more demand in the US . Joe Biden has already talked about donating the cans abroad.
However, investors should not assume that the government will then order another vaccine. While it’s not certain, it’s obvious that governments won’t do business for 2022 if they don’t even know if and when the vaccine will be delivered.
In addition, investors should bear in mind that a completely different vaccine may be required in the next few years. So when Novavax rolls out its product pipeline, the active ingredients may already be obsolete again.
There are already opportunities to market the vaccine, but these are only prospects for the future . Investors who have been investing in Novavax shares for some time should already be familiar with these future prospects. For some time now, the company has been putting off investors again and again.
From this perspective, an investment in Novavax shares appears to be speculation on a turnaround in business development.
- The Novavax vaccine comes at a comparatively late stage.
- There is a risk that governments will order little or no cans.
- Investors should keep an eye on the risks associated with Novavax shares.
Novavax share in long-term chart — nothing for the faint of heart
First a look at the chart of the NASDAQ listed Novavax share in the long-term chart, since the year 2000. What does the chart show from over two decades?
Novavax share price over the past 20 years.
The Novavax share has been moving in an extremely volatile sideways range for decades . It can also be seen that the share is currently trading at a level that has served as a resistance zone over and over again over the past two decades.
Therefore, at the current price level, the sale could now have been stopped. A ricochet at this level would now be conceivable, which is now considered a support.
The next targets for a long position would be around $ 190 first, then around $ 240, and finally the all-time high.
However, from the 190 mark onwards, the trader would have to re-probe the situation and see whether the upward momentum is maintained. Because from there there could be another downward swing.
If the current support zone does not hold, however, the price should first fall to $ 100, then to $ 78. In a very bearish scenario, then even to 45 dollars and lower.
Trading in the Novavax share is currently only suitable for speculators and traders who can keep a close eye on the chart. In no way is this a solid basic investment for a long-term depot.
Alternatives for the share portfolio: Rely on the big players
The business of developing, registering, licensing, storing and distributing vaccines is bigger than some people think . At the beginning, the development requires an enormous amount of know-how and capital.
The vaccine business will only pay off for companies in the long term. Since such a large infrastructure and capital is required , only the big players dominate the business.
It won’t be any different with the Covid vaccine. There may well be a comparatively small company that happens to make an important discovery at the right time. Then this company is simply bought up.
Investors looking for alternatives to Novavax shares could take a closer look at the following values:
- Johnson and Johnson
In particular, Pfizer and Johnson & Johnson, which incidentally is in the Johnson & Johnson split , are the big names in the international pharmaceutical market. You can find more information here: Which vaccine stocks have potential?
Novavax probably no longer has a chance in the US market . However, they could sell their vaccine in other markets .
Aside from the European market, which has some catching up to do, the company could also concentrate on markets with low incomes.
The coronavirus will keep the world busy for even longer. As a result, the demand for vaccines will not die down anytime soon, especially if annual refreshments are required.
But apart from that, investors should also ask themselves whether the current price of the Novavax share is justified . Because so far the company has been working in deficit for years.
The speculation on rising share prices could work. But there may be better candidates . Sometimes it is also better to watch what is happening from the sidelines.
Should the Novavax vaccine actually bring the desired success, investors can always get on board.