Novavax (NVAX) saw its stock price plunge 5.05% during Tuesday's trading session, as investors continue to grapple with the biotech company's ongoing regulatory hurdles and uncertain prospects in the competitive vaccine market.

The significant drop comes in the wake of several regulatory setbacks that have plagued Novavax in recent months. The U.S. Food and Drug Administration (FDA) had previously placed clinical holds on the company's phase 3 studies for its promising COVID/flu combination vaccine and standalone flu vaccine due to suspected adverse reactions. Although these holds were eventually lifted, the incident has cast a shadow over Novavax's development pipeline.

Adding to investor concerns, the FDA recently missed the deadline to approve Novavax's coronavirus vaccine, which is currently under emergency use authorization (EUA). The regulatory body has requested additional information before proceeding with full approval, further delaying the company's efforts to gain a stronger foothold in the COVID-19 vaccine market. This setback follows a history of delays in Novavax's EUA application process, which has already impacted the company's revenue potential in the highly competitive vaccine space.

While Novavax has taken steps to address these challenges, including changes in leadership and securing a promising deal with Sanofi, the market appears skeptical about the company's ability to overcome its regulatory hurdles and compete effectively with more established vaccine makers. As Novavax continues to navigate these uncertain waters, investors remain cautious, leading to today's significant stock price decline.