Novavax Has Limited Pipeline Upside, Says BofA Analyst: What's Next?

Zinger Key Points
  • Nuvaxovid is likely to underperform the longer-term consensus estimates, Stranahan said in the initiation note.
  • Novamax could meet revenue guidance for 2022, but it will be a challenge.

Although Novavax, Inc’s NVAX shares have tanked 59% year to date, there is still room for a further decline, according to BofA Securities.

The Novavax Analyst: Alec Stranahan initiated coverage of Novavax with an Underperform rating and a price target of $35.

The Novavax Thesis: Nuvaxovid is likely to underperform the longer-term consensus estimates, Stranahan said in the initiation note.

“Our physician checks suggest most Nuvaxovid use will likely be driven by competitive price/ access in developing markets, with uptake likely capped as a heterologous option in the developed world,” he added.

Although Novavax could meet its revenue guidance for 2022, “sustained investments in R&D/ SG&A (annualizing at $2-2.5B) paired with expected top-line declines in 2024-2026 as the world emerges from the pandemic create a challenging setup for sustained profitability beyond this year,” the analyst wrote.

“Resolution on approvability in flu, RSV, and malaria are also still open questions, with these markets becoming increasingly crowded and emerging competitor data looking strong relative to what Novavax has shown,” Stranahan further mentioned.

NVAX Price Action: Shares of Novavax had declined by 6.81% to $54.45 at the time of publication Friday morning.

Photo: Courtesy Novamax

Posted In: Alec StranahanBofA SecuritiesAnalyst ColorHealth CareInitiationAnalyst RatingsTrading IdeasGeneral