Investors who owned stocks in the 2010s generally experienced some big gains. In fact, the SPDR S&P 500 (NYSE:SPY) total return for the decade was 250.5%. But there’s no question some big-name stocks did much better than others along the way.
Novavax’s Difficult Decade: One poor performer of the last decade was biotech stock Novavax, Inc. (NASDAQ:NVAX).
Novavax spent much of the past decade under the radar, but its potential role in developing a vaccine for the COVID-19 coronavirus has gotten Wall Street’s attention in 2020.
Prior to 2020, Novavax’s first big run on Wall Street came in 2015 when the company received an $89 million grant from the Bill & Melinda Gates Foundation to develop a vaccine for human respiratory syncytial virus, or RSV. The stock skyrocketed in 2015 after the company reported encouraging Phase 2 trial data for its RSV vaccine candidate ResVax, but it crashed more than 85% in 2016 after ResVax failed in Phase 3 trials.
COVID-19 Impact: When the COVID-19 outbreak started getting serious in 2020, Novavax was one of the first biotech companies to begin testing a COVID-19 vaccine, NVX-CoV2373. In May, Novavax received $384 million in funding from the Coalition for Epidemic Preparedness Innovations to help fund the development and testing of NVX-CoV2373.
Just this week, the New England Journal of Medicine published a study demonstrating Novavax’s COVID-19 vaccine candidate has been both safe and effective in eliciting an immune response in patients. However, Novavax is one of more than 70 companies currently working on a COVID-19 vaccine, and there’s certainly no guarantee Novavax’s product will be the first or best one on the market.
Novavax started the 2010s trading at around $2.80. By mid-2011, the stock had traded down to under $1.20 before optimism started to build surrounding ResVax. By mid-2015, the ResVax buying frenzy had reached its peak, and the stock topped out at $15.01. Following the Phase 3 failure, Novavax shares crashed back below $2 in late 2016.
When the company announced a 20-to-1 reverse stock split in early 2019, Novavax hit its decade low of 34 cents.
2020 And Beyond: COVID-19 speculation has driven Novavax shares as high as $189.40 so far in 2020, but the stock still hasn’t regained its split-adjusted decade highs from back in 2015.
The COVID-19 rally has made Novavax shares a profitable investment over the past decade, but the return isn’t particularly outstanding. In fact, $1,000 worth of Novavax stock in 2010 would be worth about $2,403 today.
Looking ahead, analysts are optimistic the COVID-19 rally will continue. The average price target among the five analysts covering the stock is $257, suggesting about 130.5% upside from current levels.