Shares in biotech group Novavax (NVAX) soared today after its COVID-19 vaccine was finally approved by U.S. health regulators.
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Treatment Limitations
Novavax stock jumped 15% in early trading as the U.S. Food and Drug Administration (FDA) gave the green light to the vaccine Nuvaxovid. However, it limited its use to older adults aged 65 years and older and people over 12 years old with at least one underlying health condition that puts them at high risk due to the illness.
The vaccine, which is a more traditional protein-based treatment compared with mRNA rivals such as Moderna (MRNA) and Pfizer (PFE), has been available under emergency use authorization in the U.S. since July 2022.
According to a Reuters report, the vaccine’s future had been called into question after the FDA missed its April 1 deadline to approve the vaccine. U.S. Health and Human Services Secretary Robert F. Kennedy Jr., who is a longtime skeptic of vaccines, has also expressed concerns about the shot.
It will certainly give Novavax a boost as the FDA’s approval triggered a $175 million milestone payment from Sanofi (SNY) following a deal last year.
Ongoing Royalties
Under the deal, Sanofi will start marketing the vaccine later this year, with Novavax to receive ongoing royalties from sales of the vaccine. Novavax is set to deliver commercial Nuvaxovid doses this fall. It expects continued demand as COVID-19 becomes a seasonal disease.
However, it and its rivals will need to seek additional approval to alter the strain of the virus its vaccine targets for the upcoming COVID-19 immunization season. This is set to be discussed at a meeting of FDA vaccine advisers later this week.
Analysts at Leerink Partners said the approval was in line with expectations and “no more restrictive than we expected.”
Is NVAX a Good Stock to Buy Now?
On TipRanks, NVAX has a Hold consensus based on 2 Buy, 2 Hold and 1 Sell rating. Its highest target price is $19. NVAX stock’s consensus price target is $12.80 implying an 65.59% upside.
