Novavax (NVAX) Gains Ground on Phase II Data

Joel Anderson  |

Vaccine-maker Novavax (NVAX) saw shares jump on Tuesday following the success of its RSV-F vaccine in a Phase II trial. The positive data bolsters the stock in a company that has been flagging of late amid questions about heavy insider sales in 2014.

The clinical trials showed that women of child-bearing age saw increases in their antibody levels that would demonstrate the effectiveness of the vaccine and remained consistent with results from Phase I trials. From the company’s press release:

“Significant increases in RSV-F antibody levels were observed across all doses and formulations, consistent with prior studies. Peak RSV-F antibody levels were observed in the group that received a single dose of vaccine containing 120 μg of antigen with one-third of the aluminum phosphate dose used in prior studies. Clear increases in RSV neutralizing antibodies were also shown across all doses and formulations, and were strongest in women entering the study with the lowest baseline levels, in confirmation of prior studies.”

Shares in the company gapped up 7.9 percent at the opening bell to $4.25 a share and kept gaining ground as the day wore on. Caught up in surging biotechs, Novavax ultimately hit an intraday high of $4.63 a share before retreating to $4.49 a share by the closing bell for a gain of 13.96 percent.

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Small-cap biotech Novavax specializing in building vaccines using genetic engineering and recombinant nanoparticles rather than material collected from actual viruses. It’s hoped that this can ultimately allow for the creation of more customized, specific vaccines for addressing novel infectious diseases. Respiratory syncytial virus (RSV) is the most common cause of serious respiratory diseases among infants and young children.

The news is excellent for Novavax, a company still reeling after the Month of March, in which its shares declined nearly 30 percent on news that insiders Cadila Pharmaceuticals and Satellite Overseas were each selling 3 million shares of company stock. April has proven more stable but choppy, with shares seeing a daily close as high as $4.61 and as low as $3.38.

Technical factors, though, could indicate that the stock was getting ready to run prior to the day’s positive news. A look at the stock’s chart shows that the recent slide appears to have landed firmly on a rising support line that dates back to August of last year, and largely moved in tandem with the 200-day SMA. While earlier April trading had pushed share prices below that 200-day SMA, today’s rally could have been boosted by investor confidence that the stock had found a bottom in recent weeks.

Added to this was the fact that the sell-off pushed the stock’s 14-day RSI below 30.0 for most of the first half of April, a barrier typically viewed as a sign that a stock is oversold. What’s more, on April 16, a smaller rally helped push that 14-day RSI above 30.0 and also saw the MACD line cross its signal line from below, a classic buy signal.

While the clinical data is clearly what’s driving the day’s gains, these technical indicators may have added some fuel to the fire during today’s run-up.


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