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Despite positive results, Novavax stock dropped as much as 24% today (Tuesday) after a company conference call last night that discussed clinical trial data.
The conference call dealt with Novavax Inc.'s (Nasdaq: NVAX) RSV F vaccine clinical trial data. While the call actually provided good news on the vaccine, the news wasn't as good as many investors anticipated.
After the conference call, investors started to sell the stock, causing it to drop 17.2% before the markets opened this morning. The stock fell to $1.14 at 11:30 a.m. for a total drop of 24% from yesterday's closing price.
Last week, Novavax stock soared 29.1% ahead of yesterday's call. The company announced the event on July 17, and NVAX stock surged from $1.14 a share at the time of the announcement to $1.51 a share at the close of the trading day yesterday.
All of this price volatility is why I put NVAX stock on my "watch list" last week, leading up to the call.
As I mentioned, last night's conference call actually showed positive clinical trial results for the vaccine, yet the stock is down over 20% today…
Why Novavax Stock Is Down Today Despite Good News
Investors were disappointed that only topline data was discussed, even though that's how the company advertised it.
Topline data is an initial look at the clinical trial results. It usually only takes a few days to analyze and gives you a general idea of whether your target was met.
The topline data for the phase 2 clinical trial of the RSV vaccine in older adults showed that two doses of the vaccine produced a more significant immune response than just one dose. The data also showed the two adjuvants that were tested (aluminum phosphate and Matrix-M) significantly enhanced the immune response to the vaccine.
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Both takeaways are positive, but topline data only shows a broad overview. The full data could take several more months to process.
That broad data didn't provide the assurance that investors were hoping for last night. Investors were probably looking for more concrete data showing the effectiveness of the vaccine.
The lack of data is making investors nervous after Novavax had been saying the RSV vaccine was effective leading up to the failed clinical trial last year.
Investors had bid up the price of NVAX to $8.43 in the months leading up to the release of the clinical trial data for the RSV vaccine in the elderly. The stock cratered 84.5% to $1.29 a share on Sept. 15, the day Novavax announced the vaccine failed phase 3 trials.
Since then, the stock has been highly volatile.
In February, the stock dropped 8.6% in the week between the announcement of the quarterly earnings call (Feb. 17) and the last trading day before earnings were released (Feb. 24). Then, Novavax stock jumped 18% in a single day (Feb. 27) because earnings were better than expected.
The Bottom Line: Volatility is why I urged investors to keep a close eye on Novavax stock leading up to the conference call last night. NVAX remains on our biotech stock to watch going forward because of these price swings. Until there is hard data that the vaccine works, the stock is likely to remain highly volatile.
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