Some small vaccine developers that saw their stocks take off Tuesday over growing concern about the new coronavirus are using the rally to raise money.
Novavax in 2013 developed a vaccine for Middle East respiratory syndrome (MERS), which is also a coronavirus. On Tuesday after the market closed, the company filed a shelf registration seeking to raise more than $100 million over time. A spokesperson said Novavax also plans to develop a vaccine for the coronavirus. Its stock fell 15% in early trade Wednesday on concerns about dilution.
“We don’t expect Novavax will run human trials without non-dilutive government funding,” Ladenburg Thalmann’s Michael Higgens wrote in a note. “The timing for such support in our view depends on how severe and uncontrolled the 2019-nCoV becomes.”
Moderna said it is working with the National Institutes of Health on a potential vaccine response, saying its “vaccine technology could serve as a rapid and flexible platform that may be useful in responding to newly emerging viral threats.” Moderna’s stock was up 10%.
NanoViricides said it has raised $7.5 million in an offering of 2.5 million shares at a price of $3 per share. Its stock was down 55% in morning trading, after gaining 153% on Monday.
The company had also worked on treatments for MERS and the Ebola virus. NanoViricides president Anil Diwan said in an email that the company believes that the drugs “we had previously developed are worth testing against the Wuhan virus and are likely to work against it.”
The virus was first identified in December in Wuhan City, China. It has since sickened more than 300 people, including a U.S. resident who had traveled to Wuhan this month, according to the Centers for Disease Control and Prevention. China’s National Health Commission told news outlets that nine people have died and at least 440 people in China have been infected. Health officials now believe the virus is spread human to human.
“Some equities believed to have a potential tie to treatment or prevention of this infectious disease have seen positive movement today, however we believe that movement is overblown,” wrote Raymond James’ Chris Meekins on Tuesday.
The SPDR S&P Biotech (XBI) exchange-traded fund has climbed 13% over the last year, while the S&P 500 (SPX) has gained 26%.