Novavax (NVAX) Stock Climbs For Good Reason!

Novavax NVAX Stock News

Today marks the fourth session in a row that Novavax, Inc. (NASDAQ: NVAX) has been running for the top. Today, the stock is up around 60%, marking the strongest day in this run thus far.

Nonetheless, the run has a strong catalyst behind it, and there’s a good chance that NVAX will become a huge player in vaccine game. Here’s what’s going on:

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What Started The Run In NVAX Stock Value?

In a press release issued last week, Novavax announced that the United States Food and Drug Administration has granted it Fast Track Designation. The designation surrounds the company’s Phase 3 candidate, NanoFlu as a potential option for adult patients 65 years of age or older.

NanoFlu is a recombinant quadrivalent seasonal influenza vaccine that has shown incredible promise. In the release, NVAX outlined the ongoing Phase 3 trial of the candidate. Should the trial go well, the company will move forward with a Biologics License Application, or BLA, with the FDA under the accelerated approval pathway offered by the Fast Track Designation.

In a statement, Stanley C. Erck, President and CEO at NVAX, had the following to offer:

The FDA’s decision to grant Fast Track Designation for NanoFlu reflects the urgent unmet medical need for a more effective vaccine against influenza, particularly in the older adult population which often experiences serious and sometimes life-threatening complications, of the disease. We believe that NanoFlu will offer an innovative improvement compared to traditional egg-based vaccines, which frequently result in mismatch and poor effectiveness. We look forward to working closely with the FDA through the expedited review process, accelerating the access to this vaccine for the most vulnerable populations.

Why Investors Are So Excited

There’s a lot more to the run that we’re seeing in Novavax stock than meets the eye. First and foremost, the positive news led to consistent gains on a stock that had a decent level of short volume. As the stock climbed higher, short sellers started, well, losing their shorts!

As these sellers race to cover their positions, volume on NVAX is climbing along with the price of the stock in a process known as the short squeeze. Nonetheless, there’s quite a bit more than a short squeeze at play here.

We also have data to look forward to. If the Phase 3 study of NanoFlu is anything like Phases 1 and 2 have been, the data is going to be positive. Of course, this has the potential to produce more gains, and with data coming in the first quarter, the catalyst is near-term.

Another reason for the excitement here is that if NanoFlu is proven effective and safe in the Phase 3 trial, the company will submit a BLA with the FDA. This will potentially open the door to sales activities that lead to revenue.

Moreover, if NanoFlu is approved, it could be a blockbuster in the vaccine space. The truth of the matter is that over the years, flu vaccines have been losing efficacy. In previous trials, NanoFlu has proven to be far more effective than the standard of care, and I’m expecting that this is the case in Phase 3.

Considering this, if NanoFlu is approved, and NVAX commercializes properly, the vaccine can quickly become the go-to option in the space. That would essentially turn NanoFlu into a goose that lays golden eggs for the company and its investors!

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