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What is happening with Novavax?
2022-02-25 • Updated
What is Novavax?
Novavax Inc. is an American biotechnology company that develops vaccines to fight severe infectious diseases. By 2020, company scientists have developed experimental vaccines against Ebola, influenza, respiratory syncytial virus (RSV), and other emerging infectious diseases. In 2020, the company refocused its efforts on developing and approving its NVX-CoV2373 COVID-19 vaccine. In addition, Novavax indicated that it recognizes the ongoing need for innovative vaccines in other therapeutic areas and says it has taken steps to ensure that its influenza vaccine is further improved.
Their Nuvaxovid vaccine was approved in the EU at the end of 2021 and in Canada in February 2022 as the fifth COVID-19 vaccine after Pfizer/BioNTech, Moderna, Janssen, and AstraZeneca.
What is Now with Novavax?
Novavax shares (NVAX -7.43%) fell on Wednesday, February 23, in no small part due to analysts' rather sharp cut in their target price. By the time the smoke cleared, the biotech stock was down more than 7% on the day. Now the cost of Novavax stock is around $73.50.
Although many countries have already approved Novavax vaccine, the US is still delaying the approval. Novavax stake is on their vaccine to be an alternative for other current vaccines because it’s based on a well-understood protein-based vaccine platform. They are sure that it can prevent COVID-19 better.
However, last autumn FDA declared that Novavax vaccines produced at US plants were not meeting purity standard. It provoked the decrease in NVAX stocks below $140. Now they improved their vaccine to the FDA standards and they’re waiting for its approval.
Novavax’s situation will become more apparent after the company’s results of Q4 and 2021 data in general on February 28.
Apparently, most analysts are optimistic about Novavax, and they expect improvement. However, Investing.com forecasts EPS to be -0.36, and cnn.com supposes that it can range from -5.16 to 7.89. Revenue is forecast to be 453.5M.
After the Q3 release, the Novavax stock fluctuated roughly. The company reported a net loss of $322.4 million, or $4.31 per share, for the third quarter of 2021, compared to a net loss of $197.3 million, or $3.21 per share, for the third quarter of 2020. NVAX revenue in the third quarter of 2021 was $178.8 million compared to $157.0 million in 2020.
Many analysts are now quite optimistic about Novavax. In their view, the company will generate large amounts of revenue over the next two years. The problem is that these analysts are still expecting the FDA approval to go into effect relatively soon. Therefore, if there is any failure in this scenario, their predictions may be wrong. The main pitfall seems to be the slowing down of pandemic, that can lead to irrelevance of this vaccine.
The stock is currently quite cheap. In addition, it is supported by the 200-week MA at 73.90. It’s also in the area, which has been attracting investor demand since 2020. If the company delivers a good report next week, we may see a double bottom and recovery towards $100.
In the longer term, the stock needs to rise above $100 to get to $140. On the contrary, if the price slides below $70, it may be a start of a big selloff.
To sum up, Novavax is at a crossroads, will their statistics help them to improve the situation? Let’s continue to follow the news about this company and we’ll see.
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