Stock Analysis & Ideas

This Analyst Says to Be Positive About Novavax’s Covid Vaccine Chances

Like Pfizer (PFE) and Moderna (MRNA), Novavax (NVAX) has Covid-19 vaccine.

Unlike Pfizer or Moderna, Novavax’s Covid-19 vaccine hasn’t yet been approved by the U.S. Food and Drug Administration (FDA) — not even for restricted “Emergency Use Authorization,” or EUA. 

But it soon might.

On Friday last week, the FDA announced that on June 7 it will convene an advisory committee to review Novavax’s application for its NVX-CoV2373 vaccine for potential EUA. A positive outcome isn’t certain, and even if the advisory committee recommends giving EUA to NVX-CoV2373, the FDA itself might not agree. That being said, the ball is moving in the right direction right now, and investors are responding to the good news, bidding Novavax stock up ~31% over the past two trading sessions.  

B. Riley analyst Mayank Mamtani published some “quick thoughts” on this latest development and its implications for Novavax stock. A couple-few of these points stand out:

First and foremost, Mamtani notes that in contrast to Pfizer’s and Moderna’s vaccines, both of which are based on mRNA technology, Novavax’s vaccine is a protein-based vaccine and, indeed, currently “the sole viable [vaccine] alternative to mRNA [vaccines]” under consideration by the FDA. That might prove attractive to individuals who have been shying away from use of the mRNA-based vaccines, and give Novavax a niche it can fill.

Mamtani also points out that Novavax’s NVX-CoV2373 vaccine (which is also known as “Nuvaxovid”) has been approved for use in Japan, and received a Biologics License Application approval in South Korea. Indeed, according to one vaccine tracker, Nuvaxovid has been approved in 37 countries around the world — just not in the U.S. yet — and is in trials in a dozen countries, including the U.S.

That being said, here in the U.S. and in line with the review and approval process used on other companies’ vaccines, the FDA will first examine whether NVX-CoV2373 is safe and effective for use only in patients aged 18 and over. Considering that Pfizer’s and Moderna’s vaccines have already progressed through that age group, through ‘tweens, through kids, and are now being considered for use in toddlers as young as six months, there will still be a very wide gap in the total addressable market open to Novavax’s vaccine, vis a vis what Pfizer and Moderna can sell to.

You have to figure that it makes Novavax’s vaccine relatively less valuable than Pfizer’s Comirnaty or Moderna’s Spikevax, even if NVX-CoV2373 does get EUA. Yet, even so, Mamtani sees Novavax stock as being worth as much as four times what it costs today — up to $203 a share — based largely on this development. (To watch Mamtani’s track record, click here)

Timeline-wise, Mamtani says he’s expecting Novavax to submit clinical trial results to the FDA in this current Q2 “based on positive results generated from Ph. III PREVENT-19 adolescents’ cohort,” and notes that the company is already proceeding to “third booster dose evaluation,” for which Novavax may seek approval in the second half of this year.

Finally, earnings-wise, Mamtani notes that Novavax is continuing to manufacture and ship NVX-CoV2373 doses worldwide in expectation of positive EUA results. He predicts the company will succeed in raking in full year sales of between $4 billion and $5 billion, and he rates Novavax stock a “buy.”

Overall, NVAX has 7 recent analyst reviews on record, breaking down to 5 Buys and 2 Holds, giving the stock a Moderate Buy analyst consensus rating. Based on the $169.40 average price target, shares could rise ~188% in the next twelve months. (See NVAX stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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