You have to be brave to earn 2,900% per annum.
Novavax (NASDAQ: NVAX) beginning 2020 in a deep, dark hole. This is because 2019 has been a horrible year for the company. When the biotechnology reported disappointing results from its Phase 3 trial for ResVax, a vaccine for respiratory synthesis virus (RSV) in infants, the market hit the stock. Shares trade for pennies. The valuation of Novavax dropped so sharply that the company had to make a reversal of 1 to 20 in order to trade on the Nasdaq stock market. As of December 31, 2019, the stock dropped to $ 4 per share.
What a difference a year makes!
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At the beginning of the year, Novavax’s hopes were on NanoFlu, a flu vaccine. Success! Not only did it report fantastic data from its Phase 3 flu trial, but at the same time, the small biotechnology emerged as one of the leaders in the race to vaccinate the world against a new threat, COVID-19.
The small biotechnology received nearly $ 2 billion in funding from government and nonprofit sources. And then Novavax reported positive data from an early trial for its COVID-19 vaccine. This development has caused shares to rise incredibly high.
NVAX data by YCharts.
Now it’s December 2020. Investors are awaiting phase 3 trial results of the coronavirus vaccine. Positive data will cause Novavax shares to rise even higher, while bad news will cause the stock to fall.
And yet, long-term shareholders can actually relax. Novavax is now flushing with cash, and the approval of the Food and Drug Administration for the flu vaccine is likely. Investors therefore have a nice safety net if the coronavirus vaccine disappoints, while the potential upside is incredible.