If you invested $ 10,000 in Novavax during the coronavirus market crash, that’s how much money you would have now
Own Novavax (NASDAQ: NVAX) in 2020 has been a fun ride. Biotech was trading hands for $ 4 a share in early 2020, and the price hit $ 189 in August. Currently, it sells for around $ 85 a share.
What is behind these ups and downs (especially the ups)? Novavax is one of the biotechnologies that has declared war on the coronavirus. The drugmaker is a vaccine specialist, who works to immunize the world and save us from this awful disease. Let’s see how you would have done if you had bought Novavax shares during the stock market crash.
The market liquidation was terrifying
If you bought this company in January (like me), you probably did for NanoFlu, its flu vaccine which was in the midst of Phase 3 trials. In early January, no one was talking about this strange new virus in Wuhan. . COVID-19 was not yet on our radar and was irrelevant to a buying decision at the time.
But of course, over time, COVID-19 became more and more frightening and vaccine stocks started to climb. On Friday, January 17, Novavax stock closed at $ 5.74 a share. During the following weekend, Novavax ad that he was starting a program to find a vaccine against this new coronavirus. On Monday, the stock opened at $ 9.15 a share.
After a withdrawal at the end of January, Novavax quickly double in February, closing the month at $ 16 a share. At this point, Novavax had not even found its vaccine candidate yet. Just testing multiple vaccines on mice was enough to make people optimistic.
As March approached, COVID-19 dominated the news and the stock market. In my own wallet, I would have days when all of my stocks were bleeding – with the exception of Novavax, which was all green. This was when the stock market hit its lowest level of negativity for the year. The lockdown shut down the global economy. The situation got so bad that even the vaccine makers were sold.
On March 16, shares of Novavax were trading at $ 7 a share, down more than 50% in just a few weeks. If you had the cash, March was a great time to buy stocks. With $ 10,000, you could have bought 1,400 shares of Novavax at $ 7.14 per share. You would have made a lot of money since.
After five months, your investment of $ 10,000 would be worth $ 264,600
What prompted Novavax to soar so far and so quickly? Unlike most of its competitors in the vaccine race, Novavax was (and remains) a company with a small market capitalization. In the spring, its valuation was less than $ 1 billion. When you’re so little, a successful drug can really drive your stock price up. And Novavax has two potential blockbusters in its pipeline. Its influenza vaccine, NanoFlu, beat the major vaccines on the market Sanofi in several clinical trials, and when the company announced phase 3 positive data on March 24, Novavax stock climbed to $ 14 a share.
Of course, the stock market really focused on the company’s COVID-19 vaccine, and the stock continued to fly high in April as investors. tried to imagine the value of this business. In May, the Coalition for Epidemic Preparedness (CEPI) awarded Novavax a grant of $ 388 million to fund his research on the COVID-19 vaccine. This was followed by news on May 25 that Novavax had launched human trials for its vaccine candidate, NVX-CoV2373. Now the shares were worth $ 54.
In July, the world was shocked when Operation Warp Speed (the U.S. government’s program to fund vaccine candidates) paid off $ 1.6 billion to Novavax, relatively unknown, to reserve 100 million doses of its COVID-19 vaccine candidate for possible future use. Then, on August 4, Novavax announced positive phase 1 data of its clinical trial. Stock climbed to $ 189 a share on the news. That’s when your $ 10,000 investment would have been worth $ 264,600.
Of course, the stock has been halved since then, falling to $ 82 a share on Friday. Your Novavax investment is now worth around $ 114,800 – still not a bad return.
Where will this stock go in the short term? Nobody knows. But the long-term outlook for Novavax is rather positive. Based on its Phase 3 data, the company’s influenza vaccine, NanoFlu, is very likely to be approved by the United States Food and Drug Administration (FDA). And so far, the COVID-19 data has many observers claiming this vaccine is the best in its class. Hoping they’re right.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.