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Vaccine technology company Novavax (NASDAQ:NVAX) continues to slump even after announcing positive pre-clinical results from its VLP (virus-like particle) platform. The company believes the VLP platform will be capable of developing superior vaccines for both seasonal influenza (aka flu shots) and H5N1 and other strains of avian flu.

The VLP process creates a particle that is nearly identical to a virus but does not have the virus's genetic material required for replication or infection. According to the company, these particles have the ability to attach to cells and trigger a natural immune response that is capable of protecting against viral infection.

The results?

"Our initial data show that Novavax's VLP vaccines may be capable of raising a protective level of antibodies against influenza after a single inoculation," said Thomas Rowe, Research Scientist, Southern Research Institute. While seasonal flu vaccines are generally given to adults in one inoculation, influenza vaccines in young children are given in two doses. In addition, pandemic influenza vaccines currently in human clinical trials are showing a need to give at least two, high-dose, inoculations in adults to generate a protective level of antibodies. "These data also provide an early indication that it may be possible to reduce the amount of vaccine required to elicit an immune response that correlates with protection," Rowe said. In a pandemic situation, a lower dose would be very beneficial, allowing for an increased vaccine supply and the ability to protect more people.

Bottom line: This is an incremental positive, but don't expect investors to show Novavax any love until bird flu pops back on the radar screen or we get closer to the winter flu season. Contrarians will look for entries before then -- I know I would like to add to my position in the low 3's.

NVAX 1-yr chart:

NVAX 1-yr

Full Disclosure: I am long NVAX. Not a recommendation to buy or sell any security.

Source: Novavax Stuck in Downtrend