After recording a steady and steep decline in March, the shares price of Novavax, Inc. (NASDAQ:NVAX) has managed to post some gains on the chart. In the last trading session, the stock price of Novavax gained more than 2% to close the week at $0.902. The negative sentiment surrounding stock was a result of projected cash burn by the company and the lack of clinical data.
The details
Back in September 2016, Novavax reported that its phase III study of RSV F vaccine, which targeted respiratory syncytial virus in adults ages 60, has failed to meet its key endpoint. Moreover, the Phase III study failed to meet its secondary endpoint and didn’t show vaccine efficacy. As a result, investors thought it best to stay away from the stock for a while.
Despite all these released results, Novavax isn’t letting go off his efforts on its RSV vaccine. It is still progressing the Phase III PREPARE study to prevent RSV in infants through maternal immunization, and hence the drug is into Phase 2 study of older adults with one and two dosage formulations. There is some more wait before the data is released, which means Novavax may continue to trade weak in upcoming trading sessions.
Another bigger concern for the firm is its cash burn rate. The company closed 2016 with cash/cash equivalents of $235.5 million. That might appear like a lot, but the firm utilized net cash of around $255 million in net cash last year. In the coming period, the company is projected to record hefty expenses and potential funding issue.
Clearly, for now investors hope continues to remain on PREPARE trial. If this study fulfills the endpoints, unlike the RESOLVE trials, the company plans will effectively be met. Besides RSV vaccines, the company don’t have anything else in clinical studies, except for an Ebola vaccine, which as of now don’t seems to generate any interest for NVAX.
