Novavax (NASDAQ: NVAX) stock has been on a rollercoaster ride this week, with significant price swings that have left investors wondering what's behind the volatility. The biotechnology company, known for its work on a COVID-19 vaccine, has seen its shares soar and plummet in recent days. Let's take a closer look at the key events and announcements that have contributed to the stock's volatility.

Sanofi Deal Boosts Novavax Stock

On May 10, 2024, Novavax announced a co-exclusive licensing agreement with Sanofi, a major pharmaceutical company. The deal involves commercializing Novavax's adjuvanted COVID-19 vaccine worldwide, excluding areas where the company already has existing agreements. Sanofi will also be able to use Novavax's Matrix-M adjuvant to develop its own products and will take a minority stake of less than 5% in Novavax's business. In return, Novavax will receive an influx of cash, including an upfront payment of $500 million from Sanofi, with the potential for another $700 million depending on development and regulatory milestones. Additionally, Novavax could receive up to $200 million, plus royalties, for each additional Sanofi vaccine product developed using Novavax's Matrix-M adjuvant technology.

This deal with Sanofi sparked a turnaround in Novavax stock, with shares soaring to a new 52-week high. The influx of cash has removed the "going concern risk" previously associated with Novavax's business, making the company's financial outlook more stable. However, the stock's volatility is not limited to this event.

FDA Approval of Updated COVID-19 Vaccine

On May 17, the FDA approved Novavax's updated COVID-19 vaccine, which is expected to be available at thousands of locations across the U.S., including retail pharmacies and grocers. This approval strengthens Novavax's position in the market and has likely contributed to the positive sentiment among investors. However, the stock's volatility is not solely driven by this approval.

Short Interest Falling

The fall in Novavax's short interest signals that fewer investors are betting against the stock, which can be seen as a positive sign for the company's prospects. It would take about 3.09 days to cover all short positions based on average trading volumes. However, this factor alone does not explain the stock's recent volatility.

Analyst Ratings and Price Targets

Several analysts have upgraded their ratings and raised their price targets for Novavax stock in recent weeks. For example, B. Riley raised its price target to $29 from $11, and TD Cowen raised its price target to $10 from $5. These upgrades and increased price targets indicate that analysts are becoming more optimistic about the company's prospects. However, the stock's volatility cannot be solely attributed to these analyst upgrades.

Call Volume and Directionally Bullish

TipRanks reported that Novavax's call volume has been above normal and directionally bullish on multiple occasions this week. This indicates that more investors are placing bullish bets on the stock, contributing to the overall positive sentiment. However, the stock's volatility is not solely driven by this bullish sentiment.

Volatility in the Biotech Sector

The biotechnology sector as a whole has been volatile in recent weeks, with several companies experiencing significant price swings. This broader market volatility may also be contributing to Novavax's stock price fluctuations.

In conclusion, Novavax stock has experienced significant volatility this week, driven by a combination of factors including the Sanofi deal, FDA approval, falling short interest, analyst upgrades, and bullish call volume. However, the stock's volatility cannot be attributed to a single factor, and investors should consider the broader market conditions and the company's long-term prospects when making investment decisions.