Novavax (NVAX) shares have been volatile recently. News the EUA filing with the FDA for its Covid-19 vaccine NVX-CoV2373 has been further delayed – the company only submitted data concerning the manufacturing processes, suggesting the EUA filing is still a way off – has not helped matters.
However, B. Riley analyst Mayank Mamtani notes that the fact the final data package has been submitted and it includes Serum Institute of India (SII) generated CMC data that only recently formed the backbone for the WHO and EMA approvals – de-risks the EUA.
Throw in the EUA granted in India and the analyst believes investors have a “compelling opportunity to accumulate additional shares or build a fresh position as the investor expectation resets on the critical role NVX-CoV2373 has to play in ‘endemicizing’ the pandemic globally.”
The sales opportunity for Novavax in the US and the EU is “core” to the long-term thesis, but Mamtani thinks this might be getting overlooked by a couple of “unwarranted” concerns. One which perceives the easily transmissible yet relatively tame omicron variant serving as a “universal, no-consent booster.” The second is due to Novavax’s “continued execution-related challenges.” This mostly pertains to the delays in “CMC data generation activities” in more than 10 North America and EU facilities.
The latter has especially sowed doubt regarding Novavax’ competitiveness compared to available vaccines, as highlighted in a recent Politico article which said Biden administration officials were worried Novavax would be unable to manufacture enough vaccine doses.
Mamtani, however, seems unperturbed by these concerns. “We remind investors of NVAX nearing monthly manufacturing target of 150M doses; primarily via SII with India government permits already secured to export 100M+ doses with most recent permit specific to higher income countries, Netherlands, Australia & NZ where SII’s role is limited to that of a CDMO; implying 70%+ margins, off of a premium-priced product, flowing into NVAX’s profitability as we project ‘2373 to capture meaningful share of the still expanding market, likely to exceed $60B in 2022,” the analyst duly explained.
With all this as backdrop, Mamtani thinks a new price target is in order; the figure rises from $305 to a new Street-high of $315, suggesting shares will climb by 120% over the next 12 months. The analyst’s rating stays a Buy. (To watch Mamtani’s track record, click here)
While the Street’s average target is a more conservative $268, that figure can still generate returns of 87% in the year ahead. Overall, the stock has a Strong Buy consensus rating, based on 4 Buys vs. 1 Hold. (See Novavax stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
