The stock market might be in turmoil, and many stocks across sectors might be down, but investors are frantically chasing possible plays on the coronavirus theme. There are companies that are working on vaccines for the novel coronavirus, and most of those stocks have delivered significant gains so far.
However, it is Novavax, Inc. (NASDAQ:NVAX) stock that has left most companies behind and has gained as much as 500% in 2020 so far, even as S&P 500 tanked by 11.5%. Hence, Novavax could well be the best coronavirus play in the market right now, and it is important to take a closer look at the stock.
Why the Stock is Up?
It seems investors think that the company stands to make a bundle from the coronavirus vaccine that is in development at this point. Novavax does not have any products that are commercially yet, but its lead candidate is NanoFlu, a flu vaccine that is meant for people over the age of 65, and the company has stated that it could prove to be more effective than some of the competing medicines. The company has also stated that it is going to apply for accelerated designation for NanoFlu. The recent rally is, however, driven by its coronavirus vaccine candidate NVX-CoV2373.
Novavax has revealed that its vaccine candidate has displayed a high degree of immunogenicity, and that could also be a reason behind the optimism about the stock. It should also be noted that other companies, like Inovio and Moderna, among others, are also working on coronavirus vaccines.
The World Health Organization has revealed that 70 vaccine candidates are under development at this point in time, and hence, Novavax might not be the first to reach the finish line. While its flu vaccine does show promise, the coronavirus vaccine will need to beat competitors if the Novavax stock is to fly. Hence, it could be an option for investors who might have an appetite for risk.