Stock Market

Novavax Is Set To Gain From The New Covid Variant

The pandemic had brought our lives to a standstill. Thankfully, the vaccines are effective against it and have worked as a light at the end of a dark tunnel. But the new Covid variant has brought back the anxiety and stress associated with the pandemic. The World Health Organization has called it a “variant of concern” and all health officials are worried about its spread. Amidst all this, pharmaceutical companies are set to gain and Novavax (NASDAQ:NVAX) is one of them. The company has not received a vaccine authorization yet but it has been making strong moves in the industry. NVAX stock is down 30% below the highs it saw at the beginning of the year.

Novavax (NVAX) logo surrounded by medical supplies

Source: Ascannio/

The stock was trading at $331 in February 2021 and it hit the low of $121 in May 2021. NVAX stock is currently exchanging hands at $192. I believe the new covid variant and an FDA approval could work in favor of the company in the coming year. With that in mind, let’s dig deeper into the tailwinds for NVAX stock.

Omincron Coronavirus Variant

There are mounting fears and a lot of uncertainty about the Omicron coronavirus variant. This will lead to a rise in buying activity for NVAX stock. The company did not waste any time and is already looking into a version of the original vaccine for the new variant and it will have the shot available for testing in a few weeks. If the vaccine shows positive results, NVAX stock will surge.

The pharmaceutical company has received the Emergency Use Approval (EUA) for its covid vaccine from Indonesia but the company is soon to file for EUA in the U.S. and this could bring positive results. Investors are losing patience and have shown frustration due to the delay in filing for EUA in the US but the company will finally do it before the end of this year. Novavax has received a EUA in the Philippines and is awaiting a decision from the European Union. With each authorisation, the revenue is set to rise.

Rising Demand For Vaccines

The U.S. and Europe are seeing another surge in new Covid cases and it has led to a rise in the demand for vaccines. We do see a spike in Covid cases but the hospitalization is low. This proves that vaccines are effective and the best way to beat the pandemic is through vaccination. Governments across the world are trying to increase the vaccination rate. The rise in cases has moved the focus on vaccine stocks and NVAX stock is set to gain.

The stock will continue to remain in demand until we see signs of herd immunity. However, the company has to move swiftly with the approvals. Further delays could be disappointing for investors and may impact the bottom line.

The Bottom Line on NVAX Stock

The threat of a new variant will work in favor of Novavax and push the stock higher. Once the company receives an EUA from FDA, there is no looking back. The demand for vaccines is going to continue for the next few years and the company will be able to generate major revenue through it. The approval may have been delayed but the new covid variant could give a spark to the stock.

NVAX stock could soar higher in 2022 as the company reports impressive revenue numbers. Novavax may not be the most powerful vaccine maker in the world but one cannot miss the progress of the company. When it comes to vaccine manufacturers, there are never too many and Novavax may be far from the finish line, but it is not out.

The company is making progress globally and will soon file for a EUA in the US which will make a lot of difference to the stock in the long term.

On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long-term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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