Novavax Inc. (NASDAQ:NVAX) has been warned by Nasdaq that NVAX stock will be delisted should the price of the stock fail to get past a buck in the next six months.
For 30 consecutive days, NVAX stock has fallen below $1, and Nasdaq has given the Gaithersburg company until October 8 to get the price of its common stock up for 10 successive business days.
According to public filings, NVAX will hold a shareholder meeting on May 8 to contemplate the possibility of a reverse stock split. This will combine shares and thus reduce the amount of outstanding stock, which will ultimately raise the price of shares. The move NVAX is contemplating has been executed by biotech firms like Altimmune Inc. (NASDAQ:ALT), Neuralstem Inc. (NASDAQ:CUR), and Cel-sci Corporation (NYSE:CVM). These companies experience low share prices attributed to high costs of research and development of drugs that make investors and shareholders be cautious.
Stanley Erck, the CEO of Novavax, indicated that if the reverse stock split gets approved, it will increase NVAX’s stock price. However, if the board does not approve the plan or the split does not adequately increase stock price, then the company will consider other alternatives to ensure they attain compliance.
Failed Drug Study Led to Decline in Stock
The Nasdaq threat on NVAX comes at the back of a failed drug study, its second recorded failure within three years. After the announcement, NVAX’s stock tanked 69% and dropped from $2 per share to $0.67.
In today’s early morning session, NVAX stock was down 1%, selling at $0.55. The last time it went beyond a dollar was on February 27 when it closed at $2.13.
Novavax reported positive second phase trial results quite some time ago for the NanoFlu vaccine, and the company is expected to meet the FDA in the Q2 2019 to discuss the results.
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