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What happened

Shares of vaccine specialist Novavax (NASDAQ:NVAX) appear to be in for another tough session today. Ahead of the opening bell Friday, Novavax’s shares fell by as much as 10.9%. 

If this latest move lower holds, Novavax’s shares will have lost over a third of their value in just the past 30 days. Investors have been backing away from this former high-flying biotech stock in response to the unique characteristics displayed by the omicron variant.

Image source: Getty Images.

So what

In recent weeks, some top immunologists have started to float the idea that the omicron variant may be the last gasp of the pandemic. Due to omicron’s highly infectious nature, it could bring about the end to the acute phase of the pandemic by broadening natural immunity across the global population and providing a wider barrier of immune protection against the next variant of concern.

Although this scenario won’t necessarily impact the near-term sales of vaccine companies like Novavax that already have worldwide supply contracts in place, it would likely reduce the demand for COVID-19 vaccines in 2023 and beyond. Based on how Novavax’s stock has been acting over the past four weeks, the market appears to be taking this growing possibility to heart.

Now what

Should bargain hunters take advantage of Novavax’s falling share price? That’s a hard question to answer right now. Novavax’s stock certainly could rally in a big way if the company lands an Emergency Use Authorization from the Food and Drug Administration soon. Then again, it is impossible to predict how this vaccine stock will react to positive news in the midst of an exceedingly harsh bear market for biotechs. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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