Novavax may offer world's next viable vaccine; promising news can't cure market volatility

 

NVAX  (212.76 +78.75)

Not so long ago, positive vaccine news provided the antidote to whatever concern might be ailing the stock market, whether it be growth concerns, geopolitical turmoil, or rising virus cases. Strangely enough, the crazy trading action in heavily shorted names like GameStop (GME) and AMC Entertainment (AMC) turned out to be the kryptonite to this formerly reliable crutch. While the broader market sinks lower as investors weigh the potential implications of the short-squeeze mania, shares of Novavax (NVAX) are rocketing higher after reporting efficacy data for its COVID-19 vaccine, NVX-CoV2373, after the close last night. With an overall efficacy rate of 89.3%, the vaccine met the primary endpoint, setting the stage for a likely emergency use authorization filing in the near future. The massive gains in the stock seem shocking given that vaccines from Pfizer (PFE) and Moderna (MRNA), both of which are already available on an emergency use basis, achieved higher efficacy rates. Specifically, those vaccines are reported to be ~95% effective against contracting the virus. However, there are a couple important factors that distinguish NVAX's vaccine from the others. NVAX disclosed that its vaccine offered 60% protection against the more concerning South African variant of the virus. That is far lower than 95.6% efficacy rate versus the original strain, but it may be strong enough to significantly slow the spread of the more dangerous variant. This is especially important because it's already known that the vaccines from PFE and MRNA are not as effective against the South African strain. In fact, MRNA is currently working on a booster shot to guard against the new variant because its uncertain how long the current shot will provide any protection. NVAX's vaccine is seen as more practical and convenient because it's a single dose rather than a two-dose regiment, like PFE's and MRNA's. Also, since NVAX used a more traditional method to create the vaccine, it can transport doses at normal refrigeration temperatures instead of the extreme cold temperatures required for messenger RNA-based vaccines.  The simpler logistics should allow more people to get the vaccine quicker. In the weeks leading up to today's data release, NVAX secured deals with various governments to supply its vaccine, including Canada's (up to 76 mln doses), Australia's (51 mln doses), and the EU (up to 200 mln doses). With major manufacturing agreements in place, including with the Serum Institute of India, the company is positioned to immediately begin mass production, assuming the vaccine gains regulatory approval. Today's launch higher adds to NVAX's breathtaking gains over the past year. With the stock up an astounding ~3,000% yr/yr, it would seem that the promising vaccine news is priced in at this point. In this unusual trading environment, though, nothing can be completely dismissed, including another sharp move higher when and if NVAX's vaccine receives approval. https://www.briefing.com/#IN20210129125852NVAX