Novavax (NVAX) Stock Falls: Buy The Dip

Novavax NVAX Stock News

Novavax, Inc. (NASDAQ: NVAX) is tumbling in the market this morning, trading on losses of more than 13% early on. The declines come after the company filed a prospectus with the SEC, announcing that it would be raising up to $100 million.

Nonetheless, there’s good reason for the fund raise and good reason to be excited! Here’s how I see it.

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NVAX Stock Falls On Prospectus Filing

In a filing with the SEC, Novavax said that it plans on raising up to $100 million through the sale of common stock. To do so, the company has entered into a sales agreement with B. Riley FBR, Inc.

The offering will take place through at-the-market or ATM transactions with no arrangement for funds to be received in escrow, trust or similar arrangement.

In the prospectus, NVAX said that it intends to use the net proceeds from the offering for general corporate purposes. This includes working capital, captial expenditures, R&D activities, clinical trial expenses, an potential acquisitions and other strategic transactions.

Of course, with the goal of selling up to $100 million in common stock, a big concern on the minds of investors is dilution. However, in my case, the dilution is warranted, and there’s strong potential for gains ahead. Here’s why:

NanoFlu Could Be The Next Big Hit

First and foremost, as mentioned in yesterday’s post about NVAX, NanoFlu, the company’s seasonal influenza vaccine, could quickly become a blockbuster. With current standard of care vaccines losing efficacy as years pass, a new option is medically necessary.

In previous clinical studies, NanoFlu has shown improved efficacy in the fight against the seasonal flu. Moreover, the FDA recently granted Fast Track Designation for the vaccine, setting the stage for quick potential approval.

With Phase 3 data expected to come within the next month or so, this stock could fly ahead. Moreover, considering the Fast Track Designation, if all goes well in studies, the vaccine may be available on the market before the end of the next flu season, setting the stage for revenue potential.

Moreover, there has been recent concerns about the coronavirus. With the first case hitting the United States, there’s a rush to create a vaccine for the virus. NVAX recently told analyst that it is developing close for the new coronavirus as part of its first step to developing a vaccine.

So, not only is NVAX on the edge of a potential accelerated approval for NanoFlu in older adults, it is staying on the cutting edge of innovation when it comes to vaccines. All in all, even with the offering, NVAX has serious potential ahead!

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