Novavax, Inc. (NASDAQ: NVAX) is on the verge of launching its COVID-19 vaccine for individuals 18 years and above. The U.S. Food and Drug Administration (FDA) granted emergency use authorization (EUA) to Novavax’s COVID-19 vaccine, Adjuvanted (NVX-CoV2373), on Wednesday.
Despite receiving the much-awaited approval, shares of NVAX inched up a mere 0.3% in the normal trading hours and slipped 0.8% in the extended trade yesterday. The closing price of this $5.3-billion vaccine developer stood at $69.95 on Wednesday.
It is worth mentioning that the Centers for Disease Control and Prevention (CDC) is yet to recommend this vaccine. The vaccine has already received approval from the European Commission (conditional authorization) and the World Health Organization (for emergency use).
About Novavax’s COVID-19 Vaccine
The NVX-CoV2373 is a protein-based vaccine, the first of its kind in the United States. Two vaccines based on messenger RNA (mRNA) technology are available in the country. The first is by Pfizer Inc. (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX), and the second is by Moderna, Inc. (NASDAQ: MRNA). A vaccine by Johnson & Johnson (NYSE: JNJ) is also being used in the U.S.
Based on the results of a trial on 30,000 individuals, the response of the NVAX vaccine against the disease caused by SARS-CoV-2 is 90.4% effective. Storage at high temperatures is not a challenge for this vaccine.
On July 11, 2022, the U.S. government, through the Health and Human Services (HHS) and the Department of Defense (DOD), secured 3.2 million doses of Novavax COVID-19 vaccine. Upon receipt of necessary approvals, the government will supply these vaccines free of cost.
The Novavax vaccines are being prepared by the Serum Institute of India Pvt. Ltd. and a vaccine maker based in Japan. All eligible individuals will be given two doses (0.5 ml each) of NVX-CoV2373 in a gap of 21 days.
The NVAX vaccine will be administered to individuals who have not received any other COVID-19 vaccine. Also, the restriction on using the vaccine as a booster dose could be a setback for the company.
Views on NVAX Vaccine
Novavax’s President and CEO, Stanley C. Erck, said, “This authorization reflects the strength of our COVID-19 vaccine’s efficacy and safety data, and it underscores the critical need to offer another vaccine option for the U.S. population while the pandemic continues.”
Meanwhile, an official of HHS, Jason Roos, said, “While more than two-thirds of the American public are already fully vaccinated, we must maintain a sense of urgency to ensure all eligible individuals get vaccinated, particularly heading into the Fall.”
A Wall Street Journal report stated that CDC estimates nearly 67% of the U.S. population is fully vaccinated, of which approximately 48% have received the first dose.
According to a report by Barrons, FDA Commissioner Dr. Robert Califf said, “COVID-19 vaccines remain the best preventive measure against severe disease caused by COVID-19 and I encourage anyone who is eligible for, but has not yet received a COVID-19 vaccine, to consider doing so.”
Wall Street’s Take on NVAX
On June 13, 2022, Mayank Mamtani of B.Riley Financial reiterated a Buy rating on NVAX with a price target of $181 (158.76% upside potential). The analyst opined that the EUA positions NVX-CoV2373 “as the only viable alternative to mRNAs with distinguishing features around cross-variant protection, durability, and safety/reactogenicity profile.”
Overall, the Street is cautiously optimistic about the prospects of NVAX and has a Moderate Buy consensus rating based on seven Buys, one Hold, and one Sell. Also, NVAX’s price target of $126.50 suggests 80.84% upside potential from the current level. Shares of NVAX have declined 51.1% year-to-date.
Risks Haunting NVAX Stock
According to TipRanks, the two main risk categories of NVAX are Tech & Innovation and Legal & Regulatory. Each of these categories contributes 17 risks to the total 62 risks identified for the stock.
Key Takeaways for NVAX’s Investors
After a final recommendation from CDC, Novavax’s COVID-19 vaccine could be administered to individuals 18 years and above. This could boost the company’s top line in the quarters ahead.
However, skepticism over limited demand for NVAX vaccines cannot be fully ignored as a large population in the U.S. has already received doses of other companies.
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