- NASDAQ: NVAX has been extending its gains after a vaccine manufacturing deal with Fujifilm.
- The massive government grant also provides Novavax inc. room to rise.
- After a successful immunization test, additional results may trigger more buying.
Update: NASDAQ: NVAX is set to kick off the second week of August with a rise to $175 – and that may only the beginning according to Vernon Bernardino. The analysts with H.C. Wainwright set a target of $290 – calculated using potential COVID-19 dose prices. In addition to the deal with Japan's Takeda, Novavax announced an accord with the Serum Institute of India Private Limited (SIIPL) for commercializing the NVX-CoV2373 immunization option for non-rich countries. The broader market mood is tense as China sanctions Senators Ted Cruz and Marco Rubio.
While there may be no silver bullet against COVID-19 – according to the World Health Organization – Novavax has three powerful reasons to create gold for its investors. Contrary to other contenders for a coronavirus vaccine, the Gaithersburg, Maryland-based pharma firm specializes in immunization, yet there are other factors fueling the rise.
Update 6: Novavax shares are rising toward $170 in Friday's trading, defying the mixed market mood. Investors are concerned with Sino-American tensions while they are pleased with the relatively upbeat Non-Farm Payrolls report. See Reports US to sanction Hong Kong leader Carrie Lam
Update 5: NASDAQ: NVAX bulls seem to be preparing to resume buying and push shares higher after Thursday's 3.45% downside correction. Novavax is changing hands at $171 in Friday's pre-market, indicating demand remains strong for the immunization firm. The firm announced a collaboration with Japan's Takeda for the potential manufacturing of over 250 million doses of its COVID-19 vaccine candidate. Nevertheless, it is essential to note that it has competition from financially fit Vaxart.
Update 4: Profit-taking has finally reached NVAX's stock – which is changing hands at around $163 on Thursday, down some 6% after kicking Thursday's session to the upside. While hopes for a solution to the pandemic are of high importance, tension is mounting ahead of Friday's jobs report, grabbing attention. See Non-Farm Payrolls complicated by coronavirus and confusing data, dollar, gold implications
Update 3: NASDAQ: NVAX closed Wednesday's trading at $173.49, up another 10% or so. That is not the end, as shares are changing hands at around $178 in Thursday's pre-market trading. Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, gave an interview to Bloomberg, touting tens of millions of coronavirus doses by the end of the year. While he did not name any specific company, all the firms involved in developing immunization – including Novavax – are on the rise. Hopes for a vaccine are high on Thursday's agenda.
Update 2: Novavax has been gaining substantial traction, with CEO Stanley C. Erck giving interviews to financial media outlets such as Bloomberg and touting the test success. NASDAQ: NVAX is up to some 12% on Wednesday, above $176 level at the time of writing, the highest since September 2015. The small company's success may also be contributing to a broader increase in stock markets, pushing the S&P 500 higher, to around 3,330 points – despite rising coronavirus cases.
Update: Novavax has kicked off Tuesday's trading on the back foot, alongside the broader stock market and nearing the $150 mark before stabilizing. Does that provide a buying opportunity? Its upbeat fundamentals, as described below, have not changed.
Here are three reasons to be bullish on the company:
1) Fujifilm manufacturing motor
The latest upward driver for Novavax has been the announcement that it will collaborate with Fujifilm Diosynth Biotechnologies in producing its vaccines. The Japanese conglomerate – better known for its cameras – has been at the forefront of COVID-19 from the outset, with its Avagan medication.
Stanley C. Erck, CEO, and President of Novavax hailed the collaboration and said it will ensure the large-scale production of the firm's vaccine candidate. Indeed, providing the world with immunity depends on rapid output and distribution.
2) Federal funds
That large-scale manufacturing capacity does not come cheap, and here, NVAX has a funding source closer to home – the federal government in Washington. Uncle Sam will pay Novavax a whopping $1.6 billion to accelerate development and manufacturing, using the White House's "Operation Warp Speed."
OWS has already granted funds to several competitors, yet the sum of over $1 billion is one of the largest, putting Novaax in a pole position to reach the market ahead of competitors such as Moderna, Pfizer, AstraZeneca, Sanofi, and others. It is essential to note that NVAX also works with the Department of Defense.
3) Promising COVID-19 candidate
To produce a vaccine at a massive scale backed by funding, Novavax first needed a promising candidate. Its Phase 1 trial kicked off already in May in Australia, and results are due out shortly. That would open the door to Phase 2 and Phase 3, which could be conducted in the US.
Nevertheless, stocks surged on August 3, before news of the trial came out. Are investors too optimistic, or do they know something others do not? Some may assume that the firm would not jump into the deal with Fujifilm – nor take vast sums from the US government – without seeing some promising initial outcomes.
The waiting is set to come to an end and high volatility is likely.
Update 2: Novavax announced promising immune response among healthy adults that participated in its trial. The vaccine candidate was generally well-tolerated, albeit not without non-life-threatening side effects. The most promising responses to the NVX-CoV2373 candidate came from those receiving two doses three weeks apart. These subjects had neutralizing antibodies levels that were on average four times higher than recovered COVID-19 patients, 35 days after the shots.
NASDAQ: NVAX has surged above $171 in after-hours trading, an increase of nearly 9% ahead of Wednesday's regular trading session.
All in all, Novavax Inc's shares seem well-positioned to continue gaining ground.
NVAX Stock Forecast
At August 3's closing price of $155, Novavax is just below the swing high of $159.97, which serves as the next barrier. Further above, $174 was a peak back in December 2015, and it is followed by $211, another high from that year. Further above, $241 and $294 are next.
Looking down, support awaits at $140, $135, and then at $110 1nd $97.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.