Shares of pharmaceutical company Novavax (NVAX) are down 18% on news that the U.S. Food and Drug Administration (FDA) has halted one of the company’s clinical trials over safety concerns.
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The clinical trial that’s been placed on hold by the FDA involved a new combination COVID-19/influenza vaccine. The pharmaceutical regulator reportedly stopped the clinical trial after a person who received the experimental medication suffered nerve damage.
The FDA has also halted further development of Novavax’s standalone influenza vaccine. In a statement, Novavax said that it hopes to resolve the matter with the FDA as quickly as possible and begin a Phase 3 clinical trial for the combination vaccine. Despite the company’s statement, NVAX stock plunged throughout trading in New York on October 16.
The Race to Develop New Vaccines
Novavax is racing to develop a vaccine to treat both influenza and COVID-19 as sales of its standalone COVID shot decline. Novavax is not alone. Other pharmaceutical companies, including Moderna (MRNA) and Pfizer (PFE), are also trying to bring to market a combination vaccine that treats both the flu and COVID-19, as each company tries to stem a drop-off in sales following an end to the global pandemic.
Combination vaccines are seen as the best bet to expand the market for COVID-19 vaccines by linking them to seasonal flu shots. About half of adults in the U.S. get vaccinated against the flu each year, while only 28% got a COVID-19 booster in 2023, according to the U.S. Centers for Disease Control and Prevention.
Is NVAX Stock a Buy?
Novavax stock has a consensus Hold rating among five Wall Street analysts. That rating is based on two Buy, two Hold, and one Sell recommendations issued in the last three months. The average NVAX price target of $18.60 implies 85.35% upside from current levels.
