As markets opened today, the vaccine industry is facing a bleak landscape. Yesterday, the U.S. Supreme Court (USSC) blocked it vaccine mandate proposed by the administration of President Joe Biden. With policies requiring vaccinations or testing for all large companies destroyed, vaccine manufacturers face an uncertain future. While the USSC approved another term, which requires vaccines for health professionals in state-funded institutions, affects a significantly smaller group. As a result, vaccine stocks, which were growing only a few weeks ago, are now in free fall, including Novavax (NASDAQ:NVAX). As NVAX shares continue to decline, bears continue to watch. And this time they are not without reason.
What’s going on with the NVAX stock
In the first hour of today’s trading, NVAX shares jumped to fall again. Of this writing, its decline in the morning is just under 2%. This performance continues the pattern the stocks showed in the second half of this week. Since it started falling yesterday, it is currently in the red by more than 12% per week and more than 34% per month.
Recent bad news for vaccine manufacturers is not just lowering NVAX shares. This morning, the early winners of the vaccine race were Pfizer (NYSE:PFE) in Modern (NASDAQ:MRNA) slide into the red. Germany BioNTech SE (NASDAQ:BNTX) follows this. However, for Novavax, there may be more reasons to worry about the future of its industry than for better-established competitors.
Why it matters
It is no secret that vaccine manufacturers would benefit greatly from Biden’s proposed mandate. Now that the mandate is seemingly dead in the water, they face an uncertain future. Although cases continue to increase across the country due to the omicron variant, experts are keeping an eye on it the top of the virus. As well as with pediatric hospitalizations ascending, vaccinations of children are pausing. Whichever way we spin it, it’s clear that the vaccine race is losing strength.
For Novavax, the new virus wave caused by the omicron version represented new hope. A smaller biotechnology producer missed the opportunity to secure a share of the vaccine market during the spring 2021 race. However, as the market is clearly stagnant, it is unlikely that the company will make progress in the US
Wall Street already seems to be considering the uncertain future of the company. InvestorPlace author Chris MacDonald notes that: “Accordingly, investors seem to be taking increasingly bearish posture on NVAX shares. “
They have many reasons for this. The company’s chances of establishing itself as a key player in the American vaccine race are probably gone. And although the company gained approval in several other countries, this was not enough to help NVAX shares overcome the negative energy caused by today’s market momentum. And like InvestorPlace by Chris Tyler speculates, the company’s consistent absence from the stock news does no favors.
What it means
Not so long ago, NVAX shares looked promising. As we can see, however, the tide can change quickly. When the demand the company relied on suddenly disappears, it’s hard to be optimistic. Novavax would have to gain market share in the US to achieve the kind of growth his bulls were looking for.
All that said, a bull game with vaccine supplies may not be smart right now. As the mandate has failed, our presidential administration is likely to focus more on testing.
At the date of publication, Samuel O’Brient did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are the opinions of the writer who are the subject InvestorPlace.com Guidelines for publication.