If you'd invested $10,000 in Novavax (NVAX -1.44%) a year ago, you would have made a risky bet. That's because the biotech company had issued a going concern earlier this year. This warning meant that, if uncertainty persisted, the company might have had to shut down.
Prior to that, Novavax, a star earlier in the pandemic, saw its shares drop more than 90% from their peak. The company's coronavirus vaccine reached the market late and missed out on the biggest revenue opportunities, disappointing investors.
Along with the going concern, Novavax launched a major cost-cutting plan. Considering all of this, how did your $10,000 investment turn out?
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Novavax's $1.2 billion deal
Novavax has made considerable progress in controlling costs, reducing expenses in the hundreds of millions of dollars last year. But it was news about a partnership that gave the shares a clear direction over just the past few days.
Sanofi signed a $1.2 billion deal with Novavax, giving the pharmaceutical giant rights to co-commercialize Novavax's coronavirus vaccine. As a result, Novavax shares surged.
If you'd invested $10,000 in Novavax a year ago, right now, you'd have $15,200. And here's even better news: The Sanofi agreement could be a game changer for Novavax, so there's reason to be optimistic about the stock over the long term.
Why is the Sanofi deal so important? Sanofi sells the world's leading flu vaccines, so the company has the commercial infrastructure and experience necessary to help Novavax carve out market share in the coronavirus vaccine market.
Sanofi also could be the source of ongoing revenue for Novavax since it licensed the biotech's Matrix-M adjuvant technology for potential use in its products. Finally, Sanofi demonstrated its confidence in Novavax by taking a nearly 5% stake in the company.
All of this could prompt a new wave of growth for Novavax. So if you took a risk last year by buying Novavax, it's paying off -- and the momentum may be just getting started.
