Novavax (NASDAQ: NVAX) is a clinical-stage biotech company with an enviable pipeline, including a vaccine for respiratory syncytial virus (RSV), a disease that afflicts millions of people around the world. Novavax's maternal RSV vaccine candidate is in the Phase III clinical trial stage. Novavax's work toward a viable RSV vaccine won the backing of the Bill & Melinda Gates Foundation in 2015, including up to $89 million in grants to support the development and clinical trials of a maternal vaccine.
Novavax's story goes well beyond just one vaccine, with other prospective drugs in the pipeline, including vaccines for the Zika virus and Ebola, as well as a novel nanoparticle flu vaccine that utilizes the company's proprietary Matrix-M adjuvant.
This would all seem to add up to an exceptional story. Unfortunately, there is a very serious hitch: In September 2016, the Phase III clinical trial of Novavax's RSV vaccine for elderly patients, dubbed “Resolve”, laid an egg. The trial failed to meet both its primary and secondary endpoints. The market reacted as one would expect, with Novavax's share price taking a more than 83 percent dive overnight. Since then, the stock has slipped further and now trades around $1.00 per share. That is a far cry from the $8.34 per share posted the day the Resolve trial results were announced.
