Novavax, Inc. (NVAX)

Novavax is a biotechnology company engaged in creating pharmaceutical and vaccine products, and licensing them at various stages of development to realize their value. The company, using its proprietary virus-like particle and Novasome adjuvant technologies, is developing vaccines to protect against H5N1 pandemic influenza, seasonal flu, and other viral diseases. The company has transitioned from focusing on developing a pipeline of women's health pharmaceuticals to conducting research and development on proprietary formulations of FDA-approved drugs and on next-generation vaccines and biological for a variety of infectious diseases.

The company has been reporting a decline in revenues since the last five years. Continuing with the same, it witnessed a rough operating environment in 2006, which is expected to continue in 2007 also. For the past eighteen months the company was eying on avian flu pandemic to accelerate its entry into the flu vaccine market. But it did not materialize as the US government has issued the contracts to pharma majors GlaxoSmithKline, Novartis and Iomai. This shows that despite of the proclamations of its vaccine technology leadership, it has been unable to attract government funding for its bird flu programs.

The company is not expected to benefit form any other new contracts because most of the major initiatives on pandemic preparedness have already been funded and the value of any remaining contracts will be nominal. Additionally, Novavax is considered to be a Bird Flu Stock, and the investor’s interest in this stock tends to decline as the flu season ends in March. Backing on this fact it is expected that the company’s stock will trade at a lower range in the coming months.